Persimmon, one of the UK’s largest housebuilders, has strengthened its housebuilding forecasts for the year, citing encouragement from the new Labour government’s planning reforms. The company’s outlook is already being bolstered by improving consumer confidence, as evidenced by a rise in visits from potential buyers.
This positive trend is expected to continue following the Bank of England’s recent rate cut, which brought the base rate down from 5.25% to 5%, helping to reduce mortgage costs for prospective homeowners. Persimmon suggests that its housebuilding rates will also benefit from the planning reforms announced by Labour shortly after the party’s general election victory last month.
The government has pledged to reintroduce mandatory housing targets and take swift action to clear bureaucratic backlogs, aiming to boost housebuilding across the UK. Persimmon stated, “We are encouraged by the early announcements of the new government, particularly around planning. Although we recognise that the government’s welcome planning reforms will take some time to come through, our ambition remains to grow our outlet base to over 300 in the medium term.”
The company completed 4,445 new homes in the first half of the year, a 5% rise compared to the same period last year, including a 14% increase in private home completions to 3,742 homes. Recent data from Halifax shows that UK house prices increased by 0.8% in July compared to the previous month and rose by 2.3% year on year – the best rate since January. The Royal Institution of Chartered Surveyors also found that expectations for house sales increases over the next few months have reached their strongest levels since January 2020.
Dean Finch, the chief executive of Persimmon, commented, “The first half of the year has been strong with improved sales rates and robust average selling prices, despite ongoing affordability challenges. Strengthening consumer sentiment, improving macro-economic conditions and the government’s welcome and ambitious planning reforms that demand more of the high-quality, affordable homes that are Persimmon’s core strength, are all supportive of our ambition to grow this year and in the future.”
As the UK housing market continues to show signs of recovery, Persimmon’s optimistic outlook and the Labour government’s commitment to addressing the housing crisis provide a glimmer of hope for aspiring homeowners and the construction industry alike. Tags: Persimmon, UK housing market, Labour government, planning reforms, housebuilding, consumer confidence
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