HOUSEBUILDER Stewart Milne has said demand for its family homes in suburban and rural locations has hit unprecedented highs driven by people wanting more space and a sense of community.

However, the company said the impact of the Covid-19 coronavirus crisis impacted significantly on trading in the latest year.

Finance director Fraser Park said: “Like every business, we have been severely, adversely impacted by Covid and the restrictions it has imposed. As a result of the first lockdown, construction was shut-down and our sites and factories closed. Even when sites were remobilised, earlier in England, we were not fully operational immediately and experienced a lag as the supply chain geared up again. As a result, we have essentially lost four - five months of operation and, more crucially, trading.”

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Mr Park noted the group also had to invest heavily in measures to ensure the safety and well-being of employees and customers.

The trading result for the year to October 31 was also affected by the continued fallout from the slump in the North Sea oil and gas industry from 2014. This took a heavy toll on the Aberdeen area in which Stewart Milne made its name, before expanding into markets such as the Central Belt.

The company launched a restructuring and slashed the value of its land bank in response to what it concluded was a historic change in conditions.

The fall in the oil price triggered by the coronavirus crisis has posed fresh challenges for firms in the North Sea supply chain in recent months.

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Stewart Milne group did not disclose details of trading performance in the latest year, which ended on October 31.

Accounts newly filed at Companies House show it made a loss of £36m in the 16-month period ended October 31 2019, after incurring £43m exceptional costs.

However, Mr Park said the historic 2019 accounts and the “Covid impacted” 2020 performance marked a transitional period for the group and cleared the way for fundamental changes that had helped make it more competitive and more profitable. “These include a review of our cost base, the introduction of an entire new housing range, an accelerated build strategy and greater efficiencies driven by adopting digitalisation,” noted Mr Park.

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He said Stewart Milne Homes had achieved strong growth in Central Scotland and maintained volumes in North West England in the year to October 31 2019.

Stewart Milne Homes grew sales significantly in all areas in the last months of 2020, compared with the same period in 2019. It has secured reservations for over 70 per cent of new homes planned in 2021.

It is understood that the group is seeing the strongest demand on sites in the Central Belt and on Tayside. Areas of Aberdeenshire outside the traditional commuter belt, such as Alford, are becoming more popular.

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With its timber frame production business performing well, the group is on track to increase profits in the current year.

Housing market activity has increased strongly since restrictions imposed during the first lockdown were eased in May.

The EY Item Club noted yesterday that the number of mortgage approvals in December was the second highest in 13 years, at around 104,000.

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Relief from Land and Building Transactions Tax was made available for more homes in Scotland in response to the pandemic. From July, the nil rate band for LBTT residential property transactions was extended to properties selling for up to £250,000 from £145,000, until March 31.

The threshold for Stamp Duty payable in England and Northern Ireland was increased to £500,000 from July until March 31.