Young house buyers flock to Gleeson

Young house buyers have been queuing to buy Gleeson homes

The Sheffield-based group, which specialises in building houses on land that no-one else wants to buy and turning it into a desirable area that rejuvenates the local economy, said it has been able to buy land at "sensible prices" and it is seeing strong demand for its homes.

The group's CEO Jolyon Harrison said: "We've seen good demand. Young people want to get on the housing ladder. 92 per cent of our customers are first time buyers and 75 per cent are under the age of 35. We sold 60 homes to people under the age of 21.

"These are young people who have been told they can't afford to buy a new home. Some people are queuing up to buy our homes."

Pre-tax profits rose 19 per cent to £14m in the six months to December 31.

Strong cash generation in Gleeson Homes resulted in a small increase in cash from £26.4m to £26.7m despite both significantly higher dividend payments and the timing of Strategic Land’s receipts, which were especially high in the previous half year period.

Gleeson Homes is a housing regeneration specialist working in challenging communities to build new homes for sale to people on low incomes in the North of England. Gleeson said its customers are highly motivated, financially prudent and too often ignored by the more traditional big housebuilders.

Mr Harrison said that Gleeson's customers have not been affected by the increase in inflation at a time when wage growth is sluggish as its customers have benefited from the increase in the National Living Wage.

"For our customers, wages aren't falling. The National Living Wage has gone up and customers have an extra £562 a year," said Mr Harrison.

He said that the group's Yorkshire sites are proving popular.

"The old Croda site in Rotherham is positively booming," he added.

The average selling price for the homes increased 2.5 per cent to £124,400, reflecting modest price increases and the effect of plot mix and development mix.

"Our homes are still absolutely affordable," said Mr Harrison.

"A few more expensive houses were sold last year."

Last July, the group announced a plan to double its completions to 2,000 units a year within five years. Gleeson said it is already making "excellent progress" towards achieving its target.

As a sign of its confidence in the future, Gleeson is raising its interim dividend by 39 per cent to 9p a share.

Analyst Alex Stout at peel Hunt said: "The outlook for the business remains good, driven by strong demand for its affordable homes.

"With good land availability we expect Gleeson Homes to achieve its 2,000 unit completion target well within five years.

"Demand for consented land sites remains robust, though we expect profits in Strategic Land to remain flat over the next three years as the group attempts to smooth out lumpy land sales."