Housebuilder Persimmon has pointed to the beginnings of recovery in the housing market after seeing a growth in sales last year.
The York-based firm, along with all of the UK’s largest housebuilders, has seen a period of decline in recent years as rising interest rates and wider problems in the UK put the brake on sales. But now it has announced a 7% increase in housing completions last year, selling more than 10,000 homes and seeing a small increase in its average selling price.
Persimmon will announce its final results for 2024 in March but in a trading update it said that new home completions had risen to 10,664 last year and its average selling price had increased 5% to £268,500.
It also said that demand was being driven by consistently higher demand for private homes, with its private sales position 31% better off than the previous year. But it said that discounting had been in place for much of the year to drive sales.
Persimmon is now expecting full-year underlying profit before tax to be around the upper end of market expectations of between £349m to £390m.
Group chief executive Dean Finch said: “We performed well through 2024 delivering 7% growth in completions, ahead of market expectations. We expect to report an underlying operating margin in line with the prior year, as previously guided, with 2024 underlying profit before tax expected to be around the upper end of market expectations. Customer enquiries and sales rates have been consistently ahead of the prior year since the spring selling season.
“Persimmon has worked hard and is well positioned for the future, supported by the land and planning investment we have made in recent years, our vertical integration capabilities and our excellent teams. This investment, coupled with the Government’s ambitious planning reforms which demand more of the high-quality, affordable homes which are Persimmon’s core strength, supports our growth ambitions in the medium-term.”
Persimmon ended the previous year with net cash of around £260m, lower than the previous period. It had spent £60m on remediating potentially dangerous buildings during the year, bringing its spending on post-Grenfell issues to £120m. It said remediation works were either under way or completed on more than 70% of its known developments.
Persimmon said it was “well positioned” for 2025 and welcomed Government announcements on changes to planning guidance to encourage more housebuilding. But it said it was “mindful of evolving macroeconomic and geopolitical uncertainties, including the timing of future interest rate changes, and the effect that they may have on our market and consumer confidence in the short-term.”
Fellow Yorkshire housebuilder MJ Gleeson has also announced a small increase in housing completions in 2024, though it is a much smaller company.
Original artice – https://business-live.co.uk/all-about/yorkshire-humber
