Despite the doom and gloom surrounding some of the media at the moment, it looks as though it is business as usual the UK housebuilding sector. This week we saw Persimmon and MJ Gleeson issue trading statements which will have pleasantly surprised many followers. It looks as though the UK property market is still well-positioned for the long-term and any short-term fluctuations may offer “good opportunities” in the opinion of Persimmon.
Persimmon is one of the U.K.’s largest housebuilders and confirmed robust sales and what it sees as “good opportunities” in the UK property market. In a much-needed breath of fresh air, the company also believes that market fundamentals remain strong which is obviously very positive.
If we look at the actual figures, the company sold 6% more homes in the first six months of 2016 with the average price increasing by 6% at around £205,000. This despite the fact that comparative figures from last year were relatively tough it looks as though demand for UK houses is still relatively strong. This comes just days after the housebuilding sector saw a significant sell-off on the stock market which many perceive to be overdone.
MJ Gleeson statement
MJ Gleeson is classified as an urban regeneration and strategic land specialist operating with specific focus on the north-east of England. It was interesting to see a 20% increase in homes sold compared to the previous year and strong demand for services offered by company’s strategic land division. This would indicate that not only is there still good demand for houses in the UK but many housebuilders are still looking further ahead and maintaining their current investment strategies.
The company is of the opinion that the EU referendum has so far had no impact upon the company’s core customer base. Indeed MJ Gleeson believes that the relatively short land banks currently held by mid-size housebuilding customers will need to be replenished. As the company says “our business plans have not changed; for us it’s business as usual”.
It is refreshing to see more positive headlines associated with the UK housebuilding sector which has been the subject of extremely negative press coverage. The likes of Persimmon are a huge player in the UK housebuilding sector and any immediate impact from the EU referendum would have been felt already. If you dig a little deeper a growing number of experts in the field of property are suggesting that a UK exit from the European Union could offer some interesting opportunities in the longer term. Indeed, there is a belief within the sector that the doom and gloom of recent days has been overdone.
The expected impact from the recent EU referendum result has not emerged in the UK property market with Persimmon and MJ Gleeson confirming it is “business as usual”. This will give many UK property investors the confidence to look again at opportunities which have emerged in the short term due to recent volatility. Will the mass media pick up on these positive trading statements from Persimmon and MJ Gleeson or will they maintain what has been extremely negative coverage of the sector since the referendum?