Housing market conditions to remain 'highly uncertain' as election looms, Persimmon warns

It has issued a trading update ahead of its final results being published in March, which shows new home sales stood at 9,922 across 2023 – 33 per cent down on the 14,868 recorded in 2022.

But there was a strong recovery in the final quarter of the year, when 4,234 sales were recorded – representing more than 40 per cent of the entire sales for the year in a three-month period.

Its update said: “We anticipate market conditions will remain highly uncertain during 2024, particularly for first-time buyers and with an election likely this year.

"However, mortgage rates are beginning to ease, and the response to our recent Boxing Day campaign has been positive, generating a substantial number of leads for our sales teams. Encouragingly, build costs continue to moderate which will benefit completions in 2024.

“The longer-term demand outlook for new homes remains favourable. As a five-star builder, with private average selling prices below the market average, high quality land holdings, and a robust balance sheet, Persimmon is well-positioned for sustainable growth when conditions improve.”

Persimmon said its private net sales rates in the fourth quarter of 0.41 per outlet per week, excluding investor deals, was higher than the 0.28 in Q4 2022 recorded in the wake of the Government’s infamous Mini-Budget.

The update said: “We saw a sustained pick up in interest in our homes throughout the year from the lows of Q4 2022, albeit with demand lower than previous years as a result of high interest rates and the removal of Help-to-Buy.”

Dean Finch, Group Chief Executive, said: "Persimmon performed well in challenging market conditions, delivering completions ahead of expectations in 2023 alongside enhanced quality metrics of our already five-star homes.

"Persimmon's offering is resonating well with customers with sales rates relatively robust throughout the year.

"We have successfully balanced our need to control costs, whilst investing in the business to position it for sustainable growth when conditions improve.

"I would like to thank our colleagues, sub-contractors and suppliers for their commitment and support.

"Their hard work has helped ensure that Persimmon remains well positioned to serve customers across the UK who seek high quality, sustainable homes at a price they can afford."

Despite the challenges facing the market, the company’s average selling price during 2023 was up three per cent to £255,750 from a combination of its mixture of private and housing association properties.

A greater percentage of housing association properties were delivered last year, with an average sale price of £152,850 – up eight per cent on £142,017 in 2022.

The report added: “The Group's private average selling price increased by circa five per cent to circa £285,770 (2022: £272,206) which largely reflects the mix of developments and house types sold.

"Pricing was firm in the first half of the year, with some softness and increased use of incentives experienced during the second half.”