Persimmon declares housing market healthy despite mixed results

21 August 2007
UK Housing company Persimmon has reported largely positive financial results for the first half of the year, ending June 30, despite having encountered declines in buying across certain regions.

Pre-tax profits were up 9.8% to a record £281.1 million from £256.1 million in the first half of 2006. However, completions fell to 8,002 units compared with 8,226 in the prior-year period. Turnover was also down, totalling £1.51 billion compared with £1.55 billion.

Group chairman, John White, said: “All divisions have been impacted by the industry difficulties encountered in opening new developments due to delays in obtaining detailed planning consents. Despite this, all our divisions have shown underlying price growth, and have traded well albeit with some regional and local differences.”

In regional terms, the north division was mixed. Scotland completed a positive six-month period while some areas in northern England encountered declines. Overall, the division completed 1,896 units, down from 1,926 units in the first six months of 2006. However, the average selling price increased to £175,171 from £169,432.

The central division performed well completing 2,982 units compared with 2,910 units at an average selling price of £173,834, up from £169,794. Meanwhile, the south division completed just 1,781 units compared with 1,924 units at an average selling price of £182,322, down from £189,674 year-on-year.

The company sold 8.4% fewer luxury homes through its Charles Church unit as a result of planning delays and a lull in interest for the high-end housing market.

Despite reports from the Council of Mortgage Lenders that first-time buyer sales have fallen notably, Persimmon remains positive. The group anticipates higher sales for the second half of the year compared with those achieved during the same period in 2006. It recognises that the summer months are usually quieter and that general confidence in the housing market still prevails.

Despite the “short-term challenges” it is now experiencing, the company predicts increased buying activity into the autumn period.

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