Hundred-year-old construction giant to stop building homes in UK

Construction continues to suffer a slump amid persistently high inflation, rising build costs and weak housebuyer demand.

Housebuilder MJ Gleeson swung to a loss and cut jobs on Tuesday as the housing gloom continued to take its toll.

MJ Gleeson made a £2.7m loss in the year ending June 30, blaming “subdued” demand for housing. This compared with a £20.5m profit in the prior year.

Graham Prothero, the chief executive, said demand for homes had been hit by an 11-year high in homes for sale in England, rising mortgage rates, and increasing cost of living pressures.

Mr Prothero added that taxes and red tape were making it harder to build homes profitably. The burdens include a building-safety levy to pay for cladding remediation and new net zero rules.

“It is in the gift of this Government to put the brakes on some of those things,” he said. “Now is a very bad time to be imposing the new building safety levy on us … and the future home regulations [are coming] next year.

“Do we need to do that right now? Could we postpone that and ease the viability challenge? It would be great if we could get some help in that regard.”

The cost of building a new home has risen by £76,000 since 2020, according to the Home Builders Federation. Mr Prothero said half of this was because of increased taxes and regulation.

Under a restructuring at the housebuilder, the company shed 21 jobs after making 56 redundancies while creating 35 jobs.

The group also shut its East Yorkshire office, pulled out of 12 development sites that it had bought and combined its Greater Manchester and Cumbria operations.

Its housing land pipeline has fallen from 19,638 to 14,927 plots.

Mr Prothero said that the “subdued market may not improve any time soon”, so it was taking a “prudent stance” on managing its cash flows. The builder sold 1,968 homes during the year, up 10pc from the previous year.

“You shouldn’t get the impression there are no buyers out there; there absolutely are,” he said. “And we are focusing on what we can do better in order to win over those buyers.”