Builder Persimmon buoyed by easing mortgage rates

PERSIMMON sold more homes than expected in 2023, as a fall in mortgage rates boosted activity among buyers.

The FTSE 250 housebuilder revealed its sales numbers hit 9,922 in 2023, which was more than its original forecast of 9,500.

Shares in Persimmon rose by more than 5pc following yesterday’s announcement although completions were still down 33pc compared to 2022.

Dean Finch, the Persimmon chief executive, was optimistic about easing mortgage costs and falling inflation but warned that market conditions will remain highly uncertain this year.

UK housebuilders faced a tough 2023 as high mortgage rates slowed demand, particularly among first-time buyers.

However, mortgage rates have begun to ease in a sign of positivity for the housing sector, with lenders such as Co-op Bank, Santander and Barclays all now offering deals below 4pc.

At the start of December, the average five-year fixed rate was 5.65pc, whereas this fell to 5.37pc on Tuesday.

Persimmon said in its latest update that it has seen an increase in the use of home-buying incentives, such as its so-called deposit unlock scheme which allows buyers to purchase a new-build home with a 5pc deposit.

Mr Finch said: “Mortgage rates are easing but our customers on a 35-year loan are still paying close to 5pc – affordability remains a key concern. The wider economic uncertainty also remains. Inflation is falling but is not yet tamed.” He added that the removal of

‘Mortgage rates are easing but our customers on a 35-year loan are still paying close to 5pc’

the Government’s Help to Buy scheme further distressed the housing market.

Persimmon, alongside Taylor Wimpey and Barratt Developments, benefited hugely from the scheme which ended in March last year.

The chief executive also warned that buyers may hold off on purchasing until after the general election, which is expected to take place this year.

Persimmon’s house prices edged up by 5pc last year to around £285,770.