Gleeson latest housebuilder to warn of slowdown ahead of Your First Home launch

Gleeson has become the latest firm to warn of a potential short-term slowdown in the housing market as prospective first-time buyers wait for the launch of the government’s Your First Home scheme next April.

In a trading update, the housebuilder and strategic land promoter said it welcomed Your First Home as it has “significant potential to assist Gleeson’s target demographic of first-time buyers”.

But the £410m-turnover business added: “The announcement of the scheme some five months before its launch is likely to postpone demand in the intervening period and to increase cancellations.” It said it therefore anticipates a weaker first half of the year “with the pace of recovery in the second half increasingly dependent on the efficient and timely introduction of the scheme”.

This echoes comments by Bellway chief executive Jason Honeyman last month who said: “The period ahead of its launch may influence the timing of purchasing decisions among some prospective customers.”

And Vistry yesterday said it expects “some first-time buyer uncertainty as customers await further details and implementation of the scheme”.

The Your First Home scheme will allow first-time buyers to purchase a home with a 2.5% deposit with an equity loan worth 20% of the purchase price. Local maximum price caps will restrict the homes that can be bought through the scheme.

Meanwhile, Gleeson said its homes sales rates have improved from the “weak” summer but remain subdued.

It also said that it was progressing a number of sites and secured planning permission on three sites but continues to see “adverse committee decisions” following changes in political control after the local elections earlier this year, resulting in more sites having to go to appeal.