Britain’s leading housebuilder Persimmon has cautioned shareholders about an anticipated £15 million impact from national insurance contribution changes, alongside other rising costs that will affect profit margins in the coming year.
The FTSE 100 company revealed that direct labour costs would account for £5 million of the increase, while supplier-related expenses could add an additional £10 million to the total burden. These projections come as the organisation grapples with emerging build-cost inflation across its operations.
Chief Financial Officer Andy Duxbury highlighted the significance of labour costs in driving the overall increase. The changes, set to take effect from April 2025, will see employers’ national insurance contributions rise by 1.2 percentage points to 15 per cent, whilst the threshold for employer payments will drop from £9,100 to £5,000.
The Yorkshire-based builder faces additional cost pressures beyond national insurance changes. Local planning requirements now mandate heat pump installations at £5,000 per property in some locations, while nutrient neutrality regulations impose costs of up to £9,000 per home in affected areas.
Despite these challenges, Persimmon’s sales performance has shown improvement, with the company achieving 0.7 sales per site per week since July, marking a 40 per cent increase compared to the same period in 2023. The order book stands at a robust £1.45 billion, up from £1.04 billion year-on-year.
The market responded negatively to the cost warning, with Persimmon’s shares declining by 8.7 per cent to close at £13.43½, reaching their lowest point since May. The company maintains its target to deliver 10,500 homes this year, representing a modest increase from 2023 but remaining notably below 2022 levels.
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