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Persimmon reports increase in forward sales
One of the UK’s largest house builders has announced an increase of 5% in its forward sales.
In a trading update for the first half of 2018, Persimmon said that at 30 June, its forward sales were worth £1.68bn, compared with £1.6bn at the same time last year.
It also announced that it built 278 more homes in the period than it did in the same period in 2017, a 3.6% increase from 7,794 homes to 8,072.
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The group’s average selling price, meanwhile, increased by 1.2% from £213,262 to £215,800.
This stood at £236,700 for the private sales market – a 2% increase – and £117,600 for forward sales to Persimmon’s housing association partners.
Persimmon was optimistic about the land market, saying it had spent £343m on 45 new land parcels in 2018 for the delivery of around 11,000 new homes.
This was slightly less than it spent on land in the same period last year, which was £369m.
Anthony Codling, equity analyst at Jefferies, said in a note on the update: “We don’t know what Brexit will or will not look like, we don’t know when or how quickly the bank rate will start to increase but we do know that we are not building enough homes and that the [Letwin] draft analysis of the review of build-out is keen to encourage house builders to build more homes.
“With increasing paralysis in the second-hand market, new build is a more accessible choice for those who are keen to move. New build also has the advantage over the second-hand market of Help to Buy.
“We note that the draft analysis is supportive rather than critical of Help to Buy, which suggests to us it is likely to have its life extended in 2021 rather than ceasing to be.”
