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Fri July 19 2024

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Rising interest rates hit Gleeson Homes sales

7 Jul 23 House-builder Gleeson Homes sold 1,723 houses in the year ending 30th June 2023, a fall from 2,000 homes sold the previous year.

The number of sales fell but prices held firm
The number of sales fell but prices held firm

During the second half of the year, Gleeson sold 829 homes compared with 1,068 in the same period in 2022, reflecting a downturn in the wider economy and the immediate impact of higher interest rates.

In its latest trading update, Gleeson Homes says that selling prices proved “resilient” mainly because of a shortage of supply and this helped to offset increase materials and labour costs.

The average selling prices of a Gleeson home last year was £186,200, up from £167,300 last year.

Gleeson reports a significant shift in buyer demographics in the second half of the year with first-time buyers accounting for around 50% of open-market reservations (FY2022: 71%) while more than 20% of sales were to purchasers over 55 years old (FY2022: 10%). 

During the course of the year, Gleeson Homes restructured the business from nine regional management teams to six and moved to a standardised operating structure. The process resulted in annualised administrative overhead cost savings of £3.2m, at a one-off cost of £1.0m.  

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