Persimmon sees 13% profit jump

Ryan Bembridge

August 21, 2018

The housebuilder Persimmon has seen its profits increase by 13% in the first half of the year amid fears of a slowing market.

Persimmon attributed the increase to competitive mortgage rates, while the company has profited from the Help to Buy equity loan scheme’s support.

Jeff Fairburn, chief executive of Persimmon, said: “We have continued to experience good levels of customer interest in our housing development sites as we trade through the quieter summer season.

“Customers are continuing to benefit from a competitive mortgage market and confidence remains resilient based on healthy employment trends and low interest rates.”

The company sold 8,072 new homes in the first half of the year, an increase of 4% year-on-year.

Homes sold at a typical price of £215,813, up from £213,262 in the corresponding period in 2017.

Fairburn added that greater use of the group’s offsite manufacturing capability will help increase new home volumes.

Fiona Cincotta, senior market analyst at City Index, said: “Growth in average home selling prices has slowed a little, but overall this is another rock solid result.

“Permission is clearly still enjoying a boost from the government’s Help to Buy scheme, which has been extended until 2021.

“Interest rates may have risen but they still remain at historically low levels and don’t appear to be spooking prospective home buyers just yet.

“Management will be hoping the government doesn’t suddenly pull the rug from under the market in 2021, by least offering a gently phased reduction in subsidies for first home buyers.”

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