The UK housing market is showing signs of recovery, with Persimmon, one of the country’s largest housebuilders, reporting a significant increase in home sales. The developer has benefited from lower mortgage rates and a boost in consumer confidence, particularly among key workers who have recently received pay rises.
Persimmon’s chief executive, Dean Finch, attributed the company’s success to the improved affordability of its customers, many of whom are public sector employees. “The government has awarded a 5.5 per cent pay deal to the public sector and 22 per cent to junior doctors. We sell to a lot of those people and their affordability is better,” he said. The company now expects to build between 10,000 and 10,500 homes in 2024, with output likely to be at the upper end of this range.
Persimmon’s shares rose by 43p, or 2.8 per cent, to £15.81½ in response to the positive news, in contrast to the broader stock market. Persimmon, which was founded in 1972 in York, has seen its sales rates improve steadily since mortgage rates retreated from their highs last summer. Excluding bulk sales to investors, the company sold 0.59 homes per week at each of its 260 or so developments across the country between January and June, a 5 per cent increase compared to the same period in 2023.
Sales have picked up even more since the start of July, with Persimmon selling 0.69 homes per site per week, a nearly 70 per cent increase compared to the same time last year. The company’s order book has also grown by a third so far this year, reaching £1.12 billion. Finch noted that Persimmon’s developments in the Midlands and the north are generally performing better than those in the south, where homeowners typically require larger mortgages.
The average selling price for Persimmon homes was reported to be “robust” at £263,288, up 9 per cent since the start of the year. In the first half of 2024, Persimmon sold 4,445 homes, around 200 more than in the first half of 2023. The company reported revenue of £1.32 billion for the first six months, an 11 per cent increase from the £1.19 billion achieved in the same period last year. Pre-tax profits also rose by 2 per cent to £149.4 million, up from £146.4 million.
As the UK housing market continues to show signs of recovery, Persimmon is well-positioned to capitalise on the increasing demand for homes, particularly among key workers who are benefiting from improved affordability. WordPress Tags: Persimmon, UK housing market, mortgage rates, consumer confidence, housebuilders, key workers
Post Disclaimer
The following content has been published by Stockmark.IT. All information utilised in the creation of this communication has been gathered from publicly available sources that we consider reliable. Nevertheless, we cannot guarantee the accuracy or completeness of this communication.
This communication is intended solely for informational purposes and should not be construed as an offer, recommendation, solicitation, inducement, or invitation by or on behalf of the Company or any affiliates to engage in any investment activities. The opinions and views expressed by the authors are their own and do not necessarily reflect those of the Company, its affiliates, or any other third party.
The services and products mentioned in this communication may not be suitable for all recipients, by continuing to read this website and its content you agree to the terms of this disclaimer.