Scotland’s only listed housebuilder explains why home sales and prices are on the rise again
“Many of the key elements that underpin homebuyer confidence are strengthening, including decreasing inflation and the first Bank of England interest rate reduction in over four years” – Innes Smith
Scotland’s only listed housebuilder and one of the country’s biggest players has called a turning point in the house-buying market with confidence returning and reservation rates on the rise.
Springfield Properties told investors that it was encouraged by early indications for an improving backdrop after a torrid period for Britain’s housebuilders amid high interest rates, soaring inflation and low levels of buyer activity. The downturn claimed the scalp of Aberdeen-headquartered Stewart Milne Group, which had been going for nearly 50 years, with the loss of 200 jobs.
Springfield Properties’ chief executive, Innes Smith, said: “Many of the key elements that underpin homebuyer confidence are strengthening, including decreasing inflation and the first Bank of England interest rate reduction in over four years. While it remains early days, we are pleased we have started to see an improvement in private housing demand since year end - with reservation rates being ahead of the same time last year.”
Smith also said the undersupply of housing was intensifying. His comments came as the group reported full-year revenues of £266.5 million, almost 20 per cent down on the £332.1m generated a year earlier. The results for the year to May 31 also revealed an adjusted profit before tax of £10.6m, down from £16m, but ahead of management’s original expectations due to strong profits on land sales. Crucially, from an investor standpoint, Springfield has resumed its dividend, declaring a total payout for the year of 1p per share.
The average selling price for private housing during the year increased to about £316,000 from £293,000 the year before.
The group, which was established in Moray and floated on the stock market in 2017, said it had entered the new financial year in a better position than at the same point of the previous year - with a stronger balance sheet, improving private market backdrop and larger contracted order book in affordable housing. It is on track to report results for the current financial year in line with market expectations, with total revenues remaining stable and profitability on the rise.
Smith added: “We continue to have one of the largest owned land banks in Scotland, with a high proportion of sites having planning already in place. We are particularly excited about the forthcoming investment in Scotland with the creation of the Inverness and Cromarty Firth Green Freeport and the development of Scottish & Southern Energy Networks' new powerlines to provide the UK with renewable energy, which will require the building of thousands of new homes.
“We have worked across the north of Scotland for decades and are passionate about growth and development for the region. With significant land holdings in Moray and the Highlands, we are uniquely placed to help deliver this opportunity as the housing market recovers.”
Morayshire-based Springfield has grown in scale following the twin acquisitions of Tulloch Homes and Mactaggart & Mickel Homes and now has some 50 sites in Scotland. It is also a key builder of affordable housing.
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