Persimmon to reveal first half results following rate rise

Persimmon will unveil results for the first half of the year this week, with investors keen to hear management's view on whether the increase in interest rates is starting to impact sales.

Jeff Fairburn, chief executive of Persimmon
Jeff Fairburn, chief executive of Persimmon

The housebuilder will say that revenue rose five per cent to £1.84bn in the six months to June 30, with the Charles Church operator having in July pointed to “resilient” consumer confidence.

But City analysts believe the Bank of England’s recent decision to raise interest rates from 0.5 per cent to 0.75 per cent could start to impact the housing market.

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George Salmon, equity analyst at Hargreaves Lansdown, said: “Investors will be waiting to see if the Monetary Policy Committee’s decision to raise interest rates at the beginning of August has impacted Persimmon’s selling power.

“Mortgage approval rates for July showed another month of growth; an indicator that the first-time buyers Persimmon relies heavily on are continuing to find their way onto the property ladder.”

At its last trading update, Persimmon said it completed 8,072 house sales - up 3.6 per cent on a year earlier.

It also said it had a “strong platform to achieve further growth in the second half”, with forward sales five per cent higher at £1.68bn.

Persimmon also continues to be dogged by controversy over excessive pay for top bosses.

Earlier this month, the housebuilder’s chief executive Jeff Fairburn was named top of a High Pay Centre list of the 10 highest-paid bosses in 2017.