Housebuilder Gleeson attacks government policy vacuum

Published 19th Nov 2010

Housebuilder M J Gleeson (GLEG.L) said on Friday that market conditions remained difficult and that a "policy vacuum" created by Britain's new coalition government in relation to planning law was adding to its woes.

"The continuing restrictions on mortgage availability and the adverse impact of the government's spending review on consumer confidence mean that conditions in the housing market continue to be difficult," the company said in a statement.

"The policy vacuum created by the coalition government's failure to clarify the details of its proposed changes to the planning system is currently making it more difficult to obtain commercially viable residential planning consents," it added.

The company, whose market value of about 60 million pounds ($96 million) makes it one of Britain's smaller listed builders, said its own actions such as a controlling costs and a disciplined approach to land deals were making it increasingly confident about future growth.

As well as regenerating urban sites in the north of England, often on land provided by local authorities, Gleeson runs a strategic land division that identifies and buys land whose value can be boosted by winning planning consent.

Gleeson said interest from potential homebuyers continued to improve with visitors to site up by over 15 percent and unit sales up 47 percent versus last year with selling prices on most sites improving ahead of its expectations.

"Mortgage availability, however, continues to be limited," the company said. "The number of providers willing to offer high loan-to-value mortgages has increased in recent months, but such mortgages are still only a small proportion of what was available prior to the credit crunch."

The British government hopes growth from small and medium-sized companies will help offset the impact of spending cuts but the sector has complained about a lack of credit, grants and policy initiatives to help them grow.

Source: ' Reuters '

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