An autumn glow for builder Persimmon

The York-based group reported a 12 per cent increase in forward sales to £780m in the 14 weeks to November 3 and said pricing is robust across its regional markets.

Simon Usher, deputy managing director of Persimmon Homes Yorkshire, said: “The third quarter of 2015 has been an extremely busy time for the team. Interest in our developments across the region is extremely encouraging.

“In the last three months we have opened new developments in Sherburn in Elmet and Harworth and we are currently selling homes in Doncaster, Easingwold, Hull, Scunthorpe, Selby, Lincoln, Malton, Hornsea and Withernsea.”

Persimmon said it is working in partnership with local authorities to ensure enough new housing is built to meet demand.

Mr Usher said that in some areas there is an urgent need for more local housing for local people: “Persimmon has always been a housebuilder which creates homes for every level of the chain and many of our buyers are moving into their first ever home,” he said.

“Our aim is to continue to deliver homes across the region for buyers who may be renting or still living at home.”

Despite the strong trading update, Persimmon’s shares fell 3 per cent to 1859p on the back of bearish broker notes.

Hargreaves Lansdown analyst Keith Bowman said Persimmon had delivered “robust” forward sales and cash generation, but “with the share price up over 30 per cent during the last year compared to a decline of two per cent for the wider FTSE 100 Index, valuation concerns have begun to grow louder.”

Analyst Charlie Campbell at Liberum said: “Our sell rating on Persimmon is based on our view that valuations for the three largest UK housebuilders (Barratt, Persimmon and Taylor Wimpey) are too stretched to accommodate any bad news on future gross margins.

“It is our view that house price inflation in future is likely to moderate as affordability is stretched and that the FPC (The bank of England’s Financial Policy Committee) can keep a lid on house price inflation through its role as overseer of UK mortgage lending standards.”

However, Persimmon said mortgage approvals in September rose 13 per cent on a year ago.

It added that mortgage interest rates have remained at attractive levels and recent rules introduced by the Bank of England to ensure banks and building societies lend responsibly will “support a more stable and sustainable outlook for the housing market in the UK in the future”.

Persimmon’s chief executive Jeff Fairburn said: “We expect the group to continue to generate strong growth having successfully opened 105 new housing developments in the second half to date. We anticip ate opening around a further 20 new sites in the remaining weeks of this year.”

The group said its growth is being supported by the establishment of new regional businesses.