Strong trading at housebuilder Persimmon

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Housebuilder Persimmon Plc expects strong trading to continue throughout the rest of the year as the UK housing market picked up and mortgages continued a positive trend.

Since its half-year results, the York-based firm said its private sales rose 12 per cent on the same period the previous year.

Persimmon says the level of customer interest in its sites has been “encouraging” with visitor numbers running 5 per cent ahead of last year.

Mortgage approval volumes have continued the positive trend established since the start of the second quarter, the company said in its update, with approvals for house purchase in September 13 per cent ahead year-on-year.

Earlier in the year Persimmon opened two new businesses in Stockton on Teesside and Castle Bromwich.

Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said: “The demand and supply housing imbalance continues to buoy both Persimmon and rivals alike.

“Site visitor numbers remain robust, whilst further progress in forward sales, profit margin expansion and cash generation have all been reported.

“Government moves to ease planning obstacles are aiding the availability of land to purchase, while management’s focus on improving group productivity continues to be pursued.”

Mr Bowman said that the update provided no negative suprises.

He added: “Persimmon continues to deliver, with ongoing cash generation and a firmly established focus on shareholder returns underwriting investor attraction. Nonetheless and with the share price up over 30 per cent during the last year compared to a decline of 2 per cent for the wider FTSE100 index, valuation concerns have begun to grow louder.

“Worries regarding rising interest rates add to the mix, with analyst consensus opinion, on balance, currently denoting a weak hold.”