Housebuilder MJ Gleeson blames council planning departments and Budget for lack of latest houses

Housebuilder MJ Gleeson has said under-resourced council planning departments are stopping it from building more homes.

The Government has vowed to overhaul the local planning system to make it simpler and easier to approve new building projects.

But MJ Gleeson said ‘resource-constrained local planning continues to impede progress on opening new sites’.

In the six months to 31 December, Gleeson Homes opened nine new build sites, of which seven are already selling homes to customers. This was down from 11 in the same period last year.

Subdued demand: MJ Gleeson joined other housebuilders in blaming the Budget for a slowdown in sales

Budget dented demand from buyers 

It also joined other housebuilders in flagging lower buyer demand ahead of the Budget.

MJ Gleeson said demand for new homes was ‘subdued but steady’ over the period as the economy put a dent in buyers’ confidence.

This was ‘compounded further by commentary during the run-up to the late Autumn Budget,’ it added.

This included rumours such as stamp duty getting replaced by an annual levy and capital gains tax becoming payable on people’s main homes, which did not materialise. However, a ‘mansion tax’ will now apply on £2million-plus homes. 

Gleeson Homes sold 848 homes over the period, a 6 per cent increase on the previous year, with a forward order book of 978 plots of which 650 sales are expected before year-end.

Housebuilders have suffered the biggest slump since the pandemic with much of the blame placed on the timing of the Budget.

This week, Taylor Wimpey said Budget uncertainty had weighed on sales in the second half of the year, with profit margins squeezed.

While the boss of Berkeley Group said taxes and red tape were holding the construction industry back and would fail to meet the Government’s 1.5million homes target.

Despite headwinds, MJ Gleeson said the Bank of England’s December rate cut improved the outlook for the year. It expects an improvement in open market sales through spring and is confident in its full-year forecast.

Chief executive Graham Prothero said: ‘We are pleased to have delivered a solid performance in a subdued market. 

‘We now expect to see an improvement in new home sales through the spring selling season on the back of last month’s rate cut, and as uncertainty in the run-up to the Budget continues to subside.’

MJ Gleeson said it was making further changes to its restructure to ‘ensure our overhead is as lean as possible.’

Prothero added: ‘We are working hard on operational efficiency and effectiveness to ensure Gleeson Homes is in the best shape possible to capitalise on the significant growth opportunities we see ahead.

‘Along with increasing momentum at Gleeson Land, we are confident that the group is in a strong position to deliver on its strategic objectives.’