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Persimmon results and new builds

ended 08. November 2022

This morning, housebuilder Persimmon published its latest trading results. They can be seen >> here <<. Also at 09:30 this morning, we're getting the latest data from the ONS on starts and completions of new house builds in the UK. If you've got any views on the Persimmon results in particular, and/or the lack of homes we're building more generally (and reasons for this), send them over. Interestingly, Persimmon says that the “recent deterioration in market conditions” has led “to increased cancellation rates”, and added that “rising interest rates and broader economic uncertainty are clearly impacting mortgage lending and customer behaviour and this is reflected in our recent weekly sales rates and forward sales position.” Just a paragraph or so will do.

2 responses from the Newspage community

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Editor
Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
It’s been a stellar year for Persimmon sales and profits with rising house prices mitigating other increasing costs. That said, its share price has been the worst in the FTSE 100 as the market prices in forthcoming difficulties. However, help to buy was used in 20% of Persimmon purchases and that’s now closed. The economy is in recession so people are less wealthy. Interest rates have been jacked up, so owning a home is more expensive. Recent volatility can be seen immediately in an increase in Persimmon's cancellation rate from 21% to 28%. These factors will also mean that the first half of next year will be seriously tough for house builders and stock will take longer to shift and at a lower price. Depending on government policy announcements, it still could be a good full year. Every party has said they want to focus on supply side reform to some extent and home building is therefore key. This could lead to a competitive environment and with possible subsidies to stimulate at the lower end, home builders could yet have a good 2023.
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
Just because there is market uncertainty doesn't mean the need for more houses goes away. We have a huge and growing shortfall nationally and this is the problem when the government housing policy for the last decade has consisted of leaving it to the corporates and pumping their pockets full of Help to Buy money. Mr Gove recently confirmed the 300K a year new homes target and it will be interesting to see how that is delivered.