Scottish affordable house builder Springfield Properties latest to feel the pain of property slowdown
A Scottish house-building company is the latest to be financially bruised by last year’s slowdown in property sales.
This morning, publicly listed Springfield Properties said revenue slid by 25 per cent to £121m in the six months to the end of November last year.
Revenue on solely private developments was down 26 per cent to £87m, while operating profit was down 37 per cent to £4.8m.
Board members told the London market this morning that private housing demand was “impacted by high-interest rates, mortgage affordability and reduced homebuyer confidence.”
However, looking into the new year, Springfield said private housing reservation rates in calendar year 2024 “are showing initial signs of recovery with a return in homebuyer confidence.”
Build cost inflation is also continuing to reduce and stabilising around 2.5 per cent.
Springfield said it is on track to report results for 2024 in line with market expectations, including meeting a target to reduce net bank debt to around £55m by 31 May 2024.
As mortgage rates cool, sentiment in the housing market has improved.
The latest reading from Rightmove shows that house sales in the first six weeks of 2024 are 16 per cent higher than over the same period last year, and three per cent higher than pre-pandemic.
Mortgage rates have declined, in response to cooling inflation, however remain around three per cent higher than their December 2021 average of 2.34 per cent.