Housebuilder blames mini-budget for slump

CANCELLATIONS of house purchases have more than doubled since the start of the year, the London-listed housebuilder MJ Gleeson has said, blaming the fallout from the Liz Truss premiership for a slowdown in demand.

The number of houses that customers reserved on each of its Gleeson Homes sites dropped from 0.42 a year ago to 0.26 in the past six weeks, it said.

Cancellation rates in the same period jumped to 41pc compared with 20pc in the first 10 weeks of the year.

Chairman Dermot Gleeson said: “In September, we announced record revenue and profits for the year to 30 June 2022 and said that we were well-positioned to deliver further profitable growth in the current financial year, notwithstanding the outlook for the broader economy. Shareholders will be well aware that since then much has changed. The market volatility and sharp increase in interest rates following the mini-budget impacted buyer confidence and caused a significant slowdown in demand.”

Mr Gleeson said the average price one of his homes has sold for rose by 9pc over the past year to £186,500.

He said that the company’s homes still “remain attractive to first-time buyers” despite the higher prices.

Mr Gleeson added: “Furthermore, we are now seeing interest from customers who might previously have considered a more expensive property built by another developer but who, in the current environment, are attracted by Gleeson’s more affordable price points.”

The company believes it can deliver between 1,600 and 2,000 homes during this financial year.