Profits and average house price down at MJ Gleeson as property market slowdown bites

 MJ Gleeson provided fresh insight into the impact of the housing market slump on developers today, revealing a drop in profit of 55%. 

 The Sheffield-based firm made £7.2 million in group profit before tax for the six months to the end of December, down from £16.1 million a year ago. 

 It came as the number of homes sold in the period fell to 769 from 894, hit by the rise in mortgage costs in the period, after 14 consecutive rates rises from the Bank of England took interest rates to a 16-year peak of 5.25% by August. 

The slowdown pulled the average selling price down to £185,000 from £186,400 after some discounting, “on multi-unit sales”, the company said. 

 Since interest rates peaked in the summer, Gleeson said there are now “encouraging signs of a recovery in demand”, and there are over 18,000 plots in its “land pipeline”, up from just over 17,300. 

Graham Prothero, chief executive, said: “We are seeing positive signs of a recovery in demand. We expect this to continue into the seasonally busier selling period over the coming weeks and months.”

Andy Murphy, at investment research group Edison, said: “The strong forward order book of Gleeson Homes and potential reductions in interest rates in the coming months offer glimmers of hope for recovery and growth. However, uncertainties loom large, particularly with the upcoming general election and fluctuating market dynamics.”