SHARES in Springfield Properties closed up nearly 6% last night after it underlined its prospects in the affordable housing market.

The Elgin-based housebuilder revealed it had clinched a new affordable housing contract with The Highland Council worth £6.1 million.

It came weeks after the company said it had re-entered the affordable market, having paused activity in this area last year amid concern over the Scottish Government’s affordable housing investment benchmarks.

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Those benchmarks increased by 16.9% in June, which Springfield said had made affordable projects more attractive. The firm said in September that it had signed affordable contracts for £9.7m on May 31, the end of its financial year, and another for £8.1m post-year end. A further 13 were under negotiation at the time.

Yesterday, Springfield said that it was well-placed to benefit from a return to the affordable market, which it said was “supported by strong fundamentals, including a Scottish Government target to deliver 110,000 new affordable homes by 2032”.

Chief executive Innes Smith said: "We are pleased to have been awarded this affordable housing contract by The Highland Council, a long-standing partner of the group.

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"We continue to be encouraged by the interest we are receiving from local housing authorities and other affordable housing providers as they seek to meet the Scottish Government's targets and help meet recognised housing needs across the country.

"Since 31 May, we have signed affordable housing contracts totalling c.£24m and we expect to be awarded further contracts in the near term."

Updating the City in September, Springfield said that it did not expect to see “any material improvement in homebuyer confidence” before spring next year.

It suspended dividend payments and embarked on a strategy to slash debt amid significantly lower levels of reservations in private housing, citing the impact of high interest rates, mortgage affordability and reduced confidence among the house-buying public.

Shares closed up 3p, or 5.71%, at 55.5p.