Milne plans 5,000 homes as building revival accelerates

Stewart Milne is focusing on Edinburgh and the surrounding region

The Aberdeen-based company’s plans include significant expansion in Edinburgh and east central Scotland.

It is opening an office in the Apex building in Haymarket, Edinburgh, for its homes division, which will be seeking to buy land in the region and build relationships with potential partners.

Developments are expected to come onstream later this year as part of the company’s investment programme, following successful ventures at Bonnyrigg, Gorebridge and Prestonpans.

The new Edinburgh office will be led by Jonathan Fair, managing director of Stewart Milne Homes Central, backed by a team to handle land acquisition, construction and sales.

The announcement follows confirmation last autumn of a further three-year bank facility for the group.

Stewart Milne Group, an independent company established in 1975, has more than 30 sites under development in Scotland and the north-west of England with reservations already 25 per cent ahead of forecast this year. Its homes division is launching more than 20 developments over the next  18 months.

The group’s core homes and timber systems divisions generated an operating profit of £20.5 million last year from a turnover of £205.1m resulting from a 10 per cent increase in home sales. Its landholding currently comprises 2,500 consented plots and a further 11,000 plots controlled under conditional contracts. It has focused on family homes and first-time buyers to downsizers, which has seen it secure rewarded Five Star Builder Status from the Home Builders Federation (HBF) for the past three years.

Fair said: “Our homes division is well placed to capitalise on the increased demand for new homes, which is why we see Edinburgh and the surrounding region playing a key role in our forward growth plans.

“Our independence, financial strength, experience and track record of sustainable growth put us in an  ideal position to maximise new land opportunities and deliver quality homes that meet the needs of our broad customer base.”

A number of housebuilders have reported increased demand and plans to expand. Cala Homes expects to receive further investment from its joint owners as it heads towards doubling the size of the business over three years. Patron Capital and Legal & General, which bought the company last year for £210m, have committed to increasing their equity in the business on the back of solid growth in the past half-year.

The company has amassed an added landbank with a fully- developed value of £681m against a turnover last year of £250m, giving some indication of the scope for expansion. The total landbank is worth £3.6 billion.

After a long downturn, Alan Brown, the firm’s chief executive, said there were tangible signs of improvement in the market during 2013, which has continued into this year.

Peter Redfern, chief executive of Taylor Wimpey, said recently that house sales in Scotland could grow by up to  10 per cent this year.