Persimmon records first half profit

The York-based builder reported an underlying pre-tax profit of 39.4m compared with a loss 16.7m last year.

"We expect annual volume growth of new home sales to continue to be steady in line with any general improvement in the economy," said Persimmon in a statement.

Persimmon, which signed a joint-venture with property regeneration company St Modwen Properties, unveiled a write-back of 70.7m, compared with 27.9m last year.

Chairman John White said: "Overall, whilst we currently remain cautious, we are optimistic about the future of our business."

The order book including legal completions since the start of July 1 currently stands at 912m, compared with 638m at the end of December.

Persimmon plans to open 75 new sites over the next few months, with more than 50 per cent expected to be in the south.

Smaller rival Bovis Homes, which announced its intention to restore its dividend in July, said on Monday that sales rate have held up during the key summer period.

Persimmon said previously that completions rose 16 per cent in the six month period year-on-year to 4,657 homes, with the average selling price rising by 8 per cent to 168,500.

Both the Royal Institution of Chartered Surveyors and mortgage lender Nationwide reported seasonally adjusted falls in selling prices last month.

This, alongside retail sales growth slowing, is raising concerns that the recovery may be losing momentum.

Confidence in the economy has taken a sharp knock since Britain's coalition government revealed plans to cut spending by as much as a quarter to bring ballooning national debt under control.