Profits surge at Persimmon in buoyant housing market

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persimmon plc, the York-based housebuilder, posted a 57 per cent profit rise and said it was trading ahead of last year in the traditionally slower summer period, having seen little evidence so far of a recently flagged slowdown in the housing market.

Its shares jumped to a five-month high before giving up most of the gains.

Persimmon, whose lime green logo sprouts from some 400 developments across Britain, is among major housebuilders to have benefited from Government schemes such as “Help to Buy”, which enables buyers with small deposits to get a mortgage.

Chief executive Jeff Fairburn said the group had worked hard to increase volume to meet demand, encouraged by government measures to underpin the housing market and help stimulate broader economic growth.

Persimmon sold 6,408 new homes in the six months to end-June, up 28 per cent on the year before and reflecting the same trend as benefited rival Bovis Homes, which on Monday posted a 150 per cent profit jump thanks to a record number of completions. It built just over 350 homes in Yorkshire during the period.

Help to Buy, under which the Government offers a guarantee for any mortgage borrowing above 80 per cent of a property’s value up to a maximum 95 percent, along with the growing availability of mortgage financing, have been instrumental in the market’s upturn.

Property prices recorded their biggest annual rise last month since the start of the financial crisis, according to mortgage lender Halifax.

However, there are signs that rises might be starting to moderate, with a survey on Monday showing asking prices falling in August at the sharpest rate on record for that month.

Mr Fairburn, who is from York, said Persimmon was seeing a “little bit more seasonality” but visitor levels to its sites this year were still up about 6 per cent on the year before.

“We are pleased with the rate we are seeing,” he said.

“We have good forward sales of properties reserved or bought but not yet completed, up 22 per cent at £1.5 bn, which gives us good visibility to press on with the build.”

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