Essex-based housebuilder grows turnover and says it is well placed to weather downturn

Essex-based housebuilder Weston Homes saw pre-tax profit soar six-fold in results for the year to July 2022 as it continued to recover from the covid hit to the business.

The firm, which builds predominantly high-rise schemes, reported pre-tax profit of £18.2m, up from just £2.9m in the previous year.

It also saw turnover continue recover, rising 13% to £240m despite the number of homes it sold actually reducing by 88 to 754, as it completed higher value projects in the year.


Weston gained permission for the 1,280-home Lorimer Village scheme in Goodmayes in the year

The firm said in the annual report and accounts, published on Companies House, that it ended the year “in a strong position” having benefited from a “fairly stable housing market” throughout the period, which now gave it “the foundations to operate in an uncertain market.”

Weston’s focus on apartment schemes in and around London saw it report a 30% drop in turnover and 98% drop in profit as the covid pandemic hit, making just £0.5m profit in the 2019/20 year on £177m in revenue – since when it has recovered.

However, comments in the latest report and accounts make clear the financial turmoil and poor economic outlook following former chancellor Kwasi Kwarteng’s mini budget in September are now posing a fresh challenge for the year ahead.

The firm said: “Challenges with increasing interest rates, mortgage affordability and availability and increasing costs are the Group’s main focus”, but that it remained encouraged by high demand for its homes.

“The recent economic and political events have increased uncertainty in the market, but we are in a strong position to deal with all eventualities […] we are confident in building steady and sustainable growth.”

The Office for Budget Responsibility has estimated completions will drop by 25% from current levels by 2025/26 as house prices fall 9.2% peak-to-trough, with the drop off in demand that has been prompted by rising rates and the weak economy also intensified by the recent withdrawal of the government’s longstanding Help to Buy product.

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However, Weston said it entered the new financial year with forward sales of £227m, and a 7,000-home land pipeline.


Weston Homes chair Bob Weston

Speaking to Housing Today before Christmas, Weston Homes’ chair and MD Bob Weston said he believed the housing market would be more resilient than widely predicted, with fundamental underlying demand asserting itself after a “dry” January or February, during which industry output would go down.

He told Housing Today: “Logic tells us that by about February, as we launch to go into the spring/summer, undersupply in the market will stoke demand. It will be to a level that we need – it’s not that we’re booming – [but] enough to hold the business.”

He also said the firm, for which 75% of its schemes are high-rise apartment projects, was not cutting prices and was 86% forward-sold to July next year.