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Gleeson: Sustained housing upturn hampered by lack of mortgages

Gleeson has said a sustained upturn in housing sales is still being hampered by a lack of mortgage availability and low consumer confidence.

In a trading update for the period from 1 January 2010 to 19 May 2010 Gleeson said its trading is stable.

But the firm added: “A sustained upturn in house sales must await a further increase in both mortgage availability and consumer confidence.

“Meanwhile, the group will continue to focus on rigorous cost control and on the acquisition of low cost land in the North of England in order to provide growth opportunities once more normal conditions return.”

In the period, the group completed the disposal of its remaining commercial property developments.

Gleeson Regeneration & Homes has seen private housing sales ahead of the comparable period last year with selling prices generally stable and on some sites showing improvement. 

A review of house designs took place in the period, resulting in a consolidation of the number of house designs the group will build in the future, which has helped to improve the efficiency of supply chain management and to achieve a significant reduction in build costs.

Gleeson Strategic Land did not sell any sites with planning permission during the period.

However, as shown by the sales achieved in the first half of the year, the demand for development land from housebuilders has increased and further sites are likely to be sold before the financial year end.

Gleeson Capital Solutions continues to progress potential PFI opportunities and is one of two final bidders on a PFI social housing prospect in the North of England.

Powerminster Gleeson Services continues to be profitable and cash generative and is managing to maintain margins within a sector which is becoming more competitive.

The group’s had a cash balance at 30 April 2010 of £12.4 million.