Gleeson pins falling sales on mini-Budget debacle

Gleeson has said the number of homes it sold during the first half of its financial year fell because of the impact of last September’s disastrous mini-Budget, but added the rate of buyer cancellations had started to fall in the run-up to Christmas.

In a trading update for the six months to the end of December, the housebuilder said it sold 894 homes, a fall of 4% on the same period in 2021.

It added: “This reflected the weaker market and considerably higher mortgage costs as a consequence of the mini-Budget.”

Gleeson said some confidence had returned after the fallout from former chancellor Kwasi Kwarteng’s proposals, which had initially resulted in 11.5 plot cancellations per week in the six weeks to mid-November.

The firm said the fallout from the plans, hurriedly ditched by Kwarteng’s successor Jeremey Hunt, then died down with only 6.5 plot cancellations per week during the six weeks to Christmas. 

Gross reservations during the seasonally quieter six weeks before Christmas were 22.2 per week, 25% lower than the 29.5 gross reservations per week in the same period last year.

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It said that it picked up three sites during the period and started work on three more.

Gleeson’s trading update follows similar grim numbers from Taylor Wimpey, Persimmon and Barratt this week. Taylor Wimpey said it was eyeing £20m of cost cutting measures, while Barratt said it had paused recruitment, and Persimmon said it had paused or renegotiated 30 site openings in response to the market conditions.

Gleeson said its forward order book for the second half of the year was 319 plots compared to 616 last time, but added: “We are cautiously optimistic of a recovery during 2023, due to a number of factors, including that mortgage rates continue to fall from the highs experienced in October 2022, and the need for low-cost, high-quality homes remains acute.”

The firm, which has seen Graham Prothero join as chief executive at the start of the month to succeed James Thomson who has replaced Dermot Gleeson as non-executive chairman, will release its interim results on 16 February.