Healthy housing market sees sales soar

Healthy housing market sees sales soar

Persimmon has confirmed a revenue of £3.4bn for 2017, up 9% on last year, as demand for housing continues to grow.

In its latest trading update, the firm said that it increased its completions in 2017 by 6% to 16,043, with an increase of 3% in the group’s average selling price, to £213,300.

The group is confident of delivering pre-tax profits modestly ahead of consensus, which stood at £957m prior to the update, according to Thomson Reuters.

Persimmon said: “Since the launch of our Group strategy in 2012 we have made a significant contribution to increasing UK housing supply by opening 1,189 new selling outlets and delivering 80,726 new homes to the market during which time we have increased our annual production by over 70%.”

“We continued to experience healthy customer demand for new homes through the autumn sales season and the value of our forward sales on 31 December 2017 was 10% ahead of the prior year.

“We remain mindful of market risks including those associated with the uncertainty arising from the UK leaving the EU.

“However, we are keen to deliver further improvement in our housing output and remain ready to invest wherever the local planning environment is supportive.”

With the increased popularity of Help to Buy and the government’s announcement that it will cut stamp duty for first time buyers, demand for housing is only set to increase.

George Salmon, equity analyst at Hargreaves Lansdown: “With Help to Buy boosting demand for new builds, the pattern of housebuilders rising above more lacklustre data from the wider housing market is well-established.

“Sure enough, Persimmon has turned in another impressive performance despite the weaker than expected numbers in the latest Halifax survey.

“However, given the fact that uncertainty still hampers sentiment toward the sector, this update will nonetheless provide some reassurance for investors.

“In fact, with sales volumes and average prices continuing to rise, hopes will be high that Persimmon follows in the footsteps of Taylor Wimpey and Barratt Developments, the other two FTSE 100 listed national housebuilders, and bumps up its already generous dividend in February’s full-year results.”