Housebuilder upbeat as sales defy political uncertainty

Developer: Sales across the UK grow to more than £1.6bn

The property market took the snap general election in its stride according to Housebuilder Persimmon, which has racked up another set of rising sales.

In a half-year trading update covering the year to June 30, the group – which has developments across Scotland and recently started building at Muirlands Park in Arbroath – saw revenue grow 12% to £1.66bn, with the average selling price of its homes up 3.5% to around £213,000.

“Consumer confidence remains resilient and compelling mortgage rates continue to offer good support to new home-buyers,” the group told investors.

Completion volumes rose 8% to 7,794 homes in the period, with total forward sales of £1.6 bn, up 18% on last year.

Persimmon expects the strong trading seen in the first six months of 2017 to lead to progress in its operating margin, exceeding “comfortably” the 25.7% of the second half last year.

“Successful execution of the longterm strategy launched in 2012 has placed the group in a very strong financial position, with an excellent asset platform designed to position Persimmon for success through the housing cycle,” the group stated.

Persimmon shares closed up 2.36% or 54p to 2,345p.

Nicholas Hyett of Hargreaves Lansdown said that while momentum builds in the sector, rising interest rates remain “something of a bogeyman”.

However, he said: “It looks highly unlikely that interest rates are going to rise rapidly, and we think households should be able to stomach a return to the 0.5% base rate we saw before the referendum pretty comfortably.

“In any case, Persimmon’s geographic diversity and relatively low exposure to London and the South East means it’s less exposed to the areas where affordability has become most stretched and a rise in mortgage rates would be most damaging.”

Picture: Kris Miller. Builder Persimmon broke ground at its Muirlands Park development in Arbroath this spring.