Builder update

Springfield encouraged by return of homebuyers

Innes Smith, CEO of Springfield Properties which sees signs of confidence returning

Springfield Properties, Highlands-based housebuilder, said it is encouraged by the early indications of a return in homebuyer confidence, with inflation falling and the Bank of England holding interest rates for two consecutive months.

In a trading update today it said build cost inflation continues to moderate and there is greater availability of materials and subcontractors.

The interest that the group is receiving in its land bank – and at attractive valuations – reflects the market preparing for an upturn in trading conditions, it said in a trading statement for the six months ended 30 November.

Trading has been in line with management expectations with demand for private housing “stable but subdued”.

It is encouraged by the demand for affordable housing after resuming its activity in the sector. As previously announced, since 31 May the group has signed affordable housing contracts worth about £24m.

Two profitable land sales for £9.3m were agreed with funds to be received by the end of the financial year, and the company is confident of signing other agreements in the near term

An £18m additional term loan that the group secured in September to provide extra surety against the challenging market backdrop has not been used.

It said the fundamentals of the business and of the housing market in Scotland remain strong, but noted there is an undersupply of housing across all tenures, which is becoming more acute – as evidenced by three local authorities, including Edinburgh and Glasgow Councils, recently declaring housing emergencies. 

See also:

Call to axe tax on older buyers to ease housing crisis

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