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Persimmon reports forward sales increase
One of the UK’s largest house builders has reported a 10% increase in its forward sales for next year to investors.
In a trading update for the third quarter of this financial year, Persimmon said it had £909m of forward sales reserved beyond 2017, up from £829m at the same point last year.
Mike Killoran, finance director at the house builder, told a conference call with analysts that roughly half of the units – or 2,750 – in forward sales are affordable, with that figure down by about 300 from the same point last year. He said 2,500 private development units made up the rest of the forward sales book, 500 up on this point last year.
Mr Killoran clarified that Persimmon tends to book housing association orders onto their forward order book earlier than private development.
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The government’s recent announcement of a £10bn boost to its Help to Buy scheme has aided Persimmon’s shares to grow over the past month, and it said its sales rates have remained in line with this time last year, when the aftermath of the EU referendum saw a rise in sales.
Mr Killoran told the call that around 55% of Persimmon’s market sales involved Help to Buy.
In the quarter, the house builder said it spent £147m on 5,526 new plots of land, 48% of which were converted from its strategic land portfolio.
Jeff Fairburn, chief executive of Persimmon, told the conference call: “We’ve had good, strong trading. We’ve continued to see good demand on sites. We’re focused on our core customers, which are first-time buyers, first-time movers, and that market is resilient.
“Affordability is still good, and clearly supported by a competitive mortgage market, particularly on Help to Buy products, where very good fixed-rate mortgages are available. On that note, we’re very encouraged to see a further £10bn invested in Help to Buy, which enables that product to go through to 2021, which is very encouraging.”
