HOUSEBUILDING giant Miller Homes has provided a big vote of confidence in the prospects for the market in Scotland by acquiring a huge landbank, as interest in homes exceeds pre-pandemic levels on some measures.
Edinburgh-based Miller Homes has acquired Wallace Land Investments and Management for an undisclosed sum in a deal that will allow it to secure land on which it could build thousands of homes.
The deal will give the company control over a further 41 sites, boosting the size of its strategic landbank to 119 sites.
The 41 sites include 22 in Scotland and 19 in England. Miller said the additional sites will give it enough land for around 38,000 new homes, compared with 20,500 before the acquisition.
Miller Homes’ chief operating officer Stewart Lynes noted the acquisition almost doubled the size of the company’s strategic landbank. He said it allowed the firm to acquire a “well-located landbank with strong planning prospects”.
The acquisition sends a clear signal that Miller expects there to be strong demand for new homes for years to come.
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“This investment demonstrates our confidence in the housing market, which has remained incredibly resilient, and our commitment to the long-term value creation of our business,” said Mr Lynes.
He noted that Miller has benefited from the popularity of family homes in what are regarded as good locations.
This has been reinforced by the pandemic, which has encouraged some people to move out of the centres of cities in search of more living space and easier access to the countryside.
Miller Homes chief executive Chris Endsor noted the growth potential of the Scottish market before the pandemic. The company has focused on family housing in areas within commuting distance of Glasgow and Edinburgh.
While there may be a long term fall in the number of commuter journeys made as a result of the pandemic, people still appear to want homes in places that are within travelling distance of the centres of cities and towns.
Mr Lynes said Miller Homes continued to see strong demand in Scotland and was seeing very high levels of interest from buyers with activity well-above pre-pandemic levels, on measures such as website traffic, enquiries and appointments.
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He added: “With the vast majority of our developments located in edge of urban locations we are well placed to meet consumer demand for new homes in these areas.”
In its annual results announcement in March, Miller Homes noted its new product range provided flexible internal layouts that could support home working. The company said then that the sales market was buoyant. Forward sales for the current year stood at a record £560m at the end of last year, up 71 per cent on December 2019.
Operating profits fell by around a third annually last year, to £115m after lockdown restrictions impacted on sales and construction activity.
The rollout of coronavirus vaccines has provided a big boost to consumer confidence and supported the easing of restrictions.
House prices rose by 10.6 per cent in Scotland in the year to March, the Office for National Statistics said on Wednesday. The ONS said the 10.2% increase recorded across the UK represented the highest growth rate since 2007.
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In recent months other housebuilders with significant operations in Scotland have also sounded bullish about the prospects for the market.
In March Bellway noted it had bought four sites in Scotland in the six months to January 31, including land in Glasgow and Fife. The same month Taylor Wimpey chief executive Pere Redfern said the company was confident in the medium-term performance of the housing market and had accelerated land purchases from May 2020 as high-quality land became available at attractive rates.
Last week Persimmon submitted a planning application to build around 200 homes on the site of a former opencast mine near Edinburgh.
Wallace Land Investments and Management helps farmers and the like find buyers for surplus land and to win related planning permissions. The firm was started in Edinburgh by its owner Jason Wallace in 2009. Its nine employees will join Miller Homes.
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