MJ Gleeson says planning reforms must go further to meet UK homebuilding targets

MJ Gleeson said on Tuesday that recent changes to planning rules were a step forward but that "more needs to be done" to increase the efficiency and consistency of planning and regulatory systems if the Government is to meet its target of building 1.5 million new homes this parliament.

Chief executive Graham Prothero told investors the housebuilder’s momentum had been "stalled" over the past year by higher build costs, a slower-than-expected recovery in housing demand and capacity issues in the planning system that delayed site openings. The comments accompanied annual results for the year to June 30 that showed modest sales growth alongside weaker profits.

Gleeson Homes sold 1,793 units in the year to June 30, up from 1,772 the prior year, while average selling prices rose 4.3% to £193,600. Group revenue increased 6% to £366 million, but pre-tax profit fell 12% to £21.9 million, which the company said was in line with market expectations. The board maintained the dividend at 11 pence per share.

Prothero said the group had taken actions aimed at restoring momentum through fiscal 2026 and to support delivery of its strategic objectives. The company reiterated a medium-term ambition to build 3,000 homes a year, a scale it says would roughly triple its profitability, and said reforms should help its land-promotion arm, Gleeson Land, secure planning where mandatory housing requirements exist.

Gleeson, which underwent a leadership overhaul over the summer, said brownfield development and provision of affordable homes remained central to its strategy. The company argued that clearer and faster planning decisions would not only accelerate its own site openings but also meet growing demand from other developers for high-quality, consented land.

The wider housebuilding sector has also disappointed in recent quarters, adding pressure to the Government’s 1.5 million target — equivalent to roughly 300,000 homes a year. Industry executives and analysts have pointed to continued cost pressures, weaker buyer demand since the pandemic, and a stretched planning system as constraints on delivery. Market commentary has also flagged that speculation over potential property tax changes in the forthcoming budget has weighed on buyer sentiment.

On the stock market, MJ Gleeson shares were up about 2.9% at 351 pence after the update, but remain roughly 30% below their value at the start of the year. The company’s trading statement and results reflect a housing market that is showing incremental recovery in sales volumes but is not yet producing the stronger margins seen during earlier cycles.

Regulatory and planning reform has been a persistent theme in Government policy discussions, with ministers in recent months announcing measures aimed at speeding up decisions and encouraging development on brownfield sites. Developers, local authorities and planning consultants have urged further steps to provide consistent resourcing, clearer guidance and quicker determinations to unlock sites that are consent-ready or close to consent.

Gleeson’s results and commentary underscore the operational challenges facing smaller regional builders as they attempt to scale up in a market still adjusting to higher construction costs and uneven demand. The company said it remained focused on cost control, land buy-in discipline and aligning its build programme to pockets of recovering demand.

Investors and industry watchers will look to next year’s trading and any further Government planning reforms for signs that delivery can accelerate. For Gleeson, the ability to open consented sites on schedule and hit a higher annual build rate will be central to achieving the profitability gains it has set out as targets for the coming years.