Focus on affordable property is paying off for Countryside
Isabelle Fraser COUNTRYSIDE has built 28pc more homes this year as the Government boosts support for the lower priced and affordable properties that it focuses on.
The FTSE 250 company builds private homes for sale and undertakes regeneration of housing estates. It said that in the year to Sept 30 it built 53pc more houses for sale than the year before, from 783 to 1,197 homes, while completions in its “partnerships” arm increased by 17pc.
It expects this division, which is being helped by government grants and other policies, to soon be the biggest part of the business. Ian Sutcliffe, the chief executive, said: “This means we can grow the business faster because we’re not waiting behind a sales rate to build and it gives us greater resilience. When the market starts to turn [our output of affordable and rental homes] won’t slow down but could increase.”
The firm added that customer demand had remained strong, boosted by low interest rates and the Help to Buy programme, which has just been extended by the Government, and which is used on 53pc of Countryside’s private sales. Mr Sutcliffe added: “We’re really pleased with the Government reaffirming support for housing, and not just private for sale, but affordable too, which plays well to our business.”
The average selling price of Countryside’s private homes for sale fell by 23pc to £515,000 in the period, as part of its plan to reduce exposure to the subdued higher end of the market, which is suffering from slower sales rates. Its order book increased by 8pc to £242.4m, and it boosted its land bank.
Analysts at Peel Hunt said they “expect Countryside to be one of the fastest-growing businesses in the sector in the medium term”, while Jon Bell at Barclays said: “The company’s exposure to regeneration schemes means that there can be an element of detachment from wider market trends as it enjoys the benefits of local gains.” Countryside’s share price firmed 1.2p to end at 349.2p.
Meanwhile, fellow housebuilder Telford, which concentrates on areas in east London, said that the chronic housing shortage in the capital meant it had shrugged off uncertainty in the market, partly due to its lower average selling price of £530,000. However, the company said that due to the timing of some of its developments, its pre-tax profits for the six months to Sept 30 were likely to be lower than last year.
Its share price closed down 2.3pc at 398.75p.