SPRINGFIELD Properties chief executive Innes Smith has said Brexit uncertainty may be encouraging people to buy homes in Scotland and predicted demand for them will remain strong whatever the outcome of the political saga.
After posting a 69 per cent increase in annual profits, Springfield said it has been benefiting from buoyant market conditions in Scotland leaving directors confident further growth is in prospect.
Read more: Miller Homes flags 'robust' demand in uncertain market
Asked whether continued uncertainty about the Brexit process had dampened demand, Mr Smith said it may have had the opposite effect.
“We’re actually seeing customers coming to us and saying that they’re buying now because they don’t know what’s going to happen afterwards,” he said, adding: “People are seeing low interest rates and saying I want to buy now.”
Mr Smith appeared unconcerned by the possibility that any increase in sales traffic may be down to people bringing forward purchases in a way that could impact on future volumes.
He is confident that the fundamental forces driving the market will mean demand for new homes is likely to exceed supply even in the event of a hard Brexit.
Read more: Growth in home sales provides boost for Fife builder
Springfield said: “The delivery of both private and affordable housing is supported by strong market drivers. The demand for housing in Scotland continues to outstrip supply at a time when interest rates are low and mortgage availability is good. House price growth in Scotland is ahead of that in the rest of the UK.”
Mr Smith noted housebuilders have been completing around 18,000 homes per year in Scotland. That compares with the 25,000 thought necessary to meet projected demand.
Last month Miller Homes highlighted “robust” demand in Scotland. It expressed confidence in the resilience of UK regional housing markets noting that many customers had an overwhelming need to acquire a new home.
Noting yesterday that Springfield wants to achieve further growth, executive chairman Sandy Adam said: “There’s plenty of opportunities to do that.”
He confirmed that further acquisitions could be on the agenda for Springfield.
Read more: Springfield buys rival in £20m Dawn raid
The company has expanded into the West Central Scotland area and increased its presence in the Edinburgh commuter belt markets in recent months through the acquisition of Dawn Homes and Walker Group respectively. It has been pleased with the outcome of both moves.
Mr Adam said Springfield would not rule out a move into England, having looked at one opportunity in that market that directors decided was not right.
Springfield completed a flotation on the Aim market in 2017 which left it with increased firepower to support growth.
It recently moved into the Inverness market through what directors described as a strategic land acquisition.
Springfield said its land bank “provides activity for at least the next 16 years at current sales rates”.
Total revenues increased to £190.8m in the year to May 31, from £140.7m in the preceding year.
The group sold 630 homes in the private housing market in the year to May 31, against 460 last time.
The average selling price achieved increased to £227,000 from £222,000.
Springfield sold 322 affordable homes compared with 310 in the preceding year. The average selling price rose to £133,000 from £120,000.
Profit before tax and exceptional charges increased to £16.5m from £9.8m.
The group proposed a final dividend of 3.2p per share, taking the full year total to 4.4p up from 3.7p.
Shares in Springfield Properties closed up 4p at 110p.
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