Persimmon expects strong demand for new homes despite election

Housebuilder Persimmon said it expects demand for new homes to remain robust this year despite uncertainty caused by the upcoming election in may.

The York-based company reported a 23 per cent year-on-year rise in full-year revenue to £2.6bn on Wednesday, slightly ahead of analyst estimates, as it built 17 percent more homes in 2014 than in the previous year.

Jeff Fairburn, chief executive of Persimmon, said: “We’re going into an election year, that does create a little bit of uncertainty but we anticipate to see good demand for the products we’re producing.”

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Housebuyers tend to be cautious about making purchases around election time but Mr Fairburn said the availability of attractive mortgage products and recent cuts to stamp duty payments for many were set to prop up demand this year.

Last month, Chancellor of the Exchequer George Osborne cut a tax on nearly all property purchases, making home ownership easier especially for first-time buyers.

Persimmon had already forward sold £973m worth of new homes as of December 31, seven per cent higher than the same time last year, providing a strong start to the financial year.

In 2014, the housebuilder fulfilled 13,509 legal completions, with the average new home selling at a five per cent premium over 2013 at £190,500.

Persimmon’s cash position at the end of the year stood at around £378m, paving the way for a 2014 dividend payment to shareholders, Mr Fairburn said.

The company last year brought forward part of a planned £1.9bn payout to shareholders which covers the period to 2021.