Persimmon sees sales jump despite Election

Jeff Fairburn, chief executive of Persimmon, said the company was seeing 'good confidence' in the housing sector thanks to an increasingly competitive mortgage market. 'Picture: Simon Hulme
Jeff Fairburn, chief executive of Persimmon, said the company was seeing 'good confidence' in the housing sector thanks to an increasingly competitive mortgage market. 'Picture: Simon Hulme
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​​Election jitters failed to derail Persimmon, one of Britain’s biggest housebuilders, which reported a seven per cent jump in house sales in the first half of 2015 despite opinion polls predicting that no party would secure an overall majority in parliament.

The York-based company shifted 6,855 homes in the six months to June 30 and revenues rose 12 per cent to £1.34bn.

National polls, especially when a close or uncertain result is predicted, are often blamed for cooling demand in the housing market, but Persimmon’s chief executive Jeff Fairburn said: “We traded well up to the Election, We really didn’t see any effect and we’ve strengthened further since then.

“It’s a good sign and we’re seeing good confidence. It’s a very positive picture for the homebuyer who wants to buy in good locations at the right price.”

​He said that visitor numbers to sites across the UK have been ​strong.

​“We tend to get a lot more activity on our website these days. By the time people get to the site they’re pretty serious and they know what they want. That means a greater percentage are translating into sales,” he added.

“The mortgage market is pretty affordable​ and cancellation rates are pretty low at around 10 per cent.”

Customer demand has been supported by an increasingly competitive mortgage market over the last six months, together with continued growth in employment and ​a​n improvement in disposable incomes.

​Persimmon, which was founded by Duncan Davidson, said the​ opportunity to buy a newly built home remains compelling.

The average selling price for the ​g​roup increased by​ four per cent in the first half of 2015 to £195,000​, up from​ £186,970​ last year.

Mr Fairburn said it is important that house price inflation is kept under control​.

​“We don’t want prices increasing substantially,” he added.

​For the first half of the year the ​g​roup’s weekly rate of sale into the private sale market was 11​ per cent​ ahead of ​last ​year.

​By the end of​ June​,​ forward sales volumes into the private sale market were 12​ per cent​ ahead of last year at 4,606 new homes with an average selling price of £213,000, which was again​ ​four per cent​ ahead of last year.

Total forward sales value ​by the end of​ June increased by 15​ per cent​ to £1.36​​bn​.

​Persimmon said it opened​ 122 new sites in the first half of the year despite experiencing a slow-down in the planning application process in the period running up to the General Election.

As a result its network of 395 active sites was five per cent stronger than at the start of the year.

“We continue to actively develop all sites where we have an implementable detailed planning consent and plan to open a further 125 new sites during the second half of the year,” said Mr Fairburn.

He added that there was a bit of a slowdown in planning application approval towards the Election, but this has returned to more normal levels.

“Planning is still difficult and it takes too long, but we expect to increase the number of outlets in the meantime,” he said.

The new sites include a number in Yorkshire with 259 units in Castleford, 250 units in Harworth, 220 units in Wormbwell, 139 units in Penistone, 116 units in Easingwold and 70 units in Wakefield.

​​Persimmon said t​he land market continues to provide attractive opportunities for investment to support the future growth of the business.