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‘Confident’ housing market behind healthy profit rise for Persimmon

PUBLISHED: 08:35 27 February 2017 | UPDATED: 09:36 27 February 2017

Persimmon Homes. Picture: Persimmon Homes.

Persimmon Homes. Picture: Persimmon Homes.

Archant

Housebuilding giant Persimmon has notched up a healthy rise in full-year profit as it pointed to a “confident” housing market, despite concerns over Brexit.

The group, which has an East Anglian branch, said pre-tax profits rose 23% to £774.8m in the year to December 31, while revenue rose 8% to £3.1bn.

“Despite some understandable caution being exercised by consumers and corporates alike during the period ahead of the EU referendum, the result created an immediate and significant uncertainty in the markets.

“However, the vast majority of the group’s customers remained focused on exchanging contracts and completing their new home purchases,” Persimmon said.

Chairman Nicholas Wrigley added customer activity in the early weeks of the 2017 spring season has been “encouraging”.

The company said of current trading: “The UK new build housing market remains confident with customer demand for new homes supported by compelling mortgage products.

“We are pleased with customer activity in the first eight weeks of the 2017 spring season.

“Visitors to our sites are circa 7% ahead year on year.

“We have experienced a normal week-on-week strengthening of the market on entering the 2017 spring selling season.”

Buyer demand and house prices have been surprisingly resilient since the referendum, thanks largely to rock-bottom borrowing costs after the Bank of England halved interest rates to 0.25% in August.

Persimmon also flagged the “overall shortage of supply of housing in the UK” as a factor providing support to the market.

However, the company added: “We remain wary of the risks and increased uncertainties associated with the EU referendum result.

“The group is in a strong position to remain selective in its land replacement activities given the strength of its existing asset platform.”

Legal new home completions increased by 599 to 15,171 and the average selling price rose 3.8% to £206,765 last year.

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