Persimmon sees sales defy the election uncertainty

The York-based housebuilder said so far this year, sales including legal completions total around 1.5bn.

Better prices and an improved sales mix, featuring more private homes, meant the sales increase outstripped a volume increase of about 11 per cent.

The group, Britain's biggest housebuilder by market value, added weekly visitors per site are "constant" and it has seen good conversion into reservations. Cancellations remain at historically low levels, it said.

"Weekly sales volumes have remained consistent despite a backdrop of continued uncertainty regarding the wider economic outlook and the forthcoming General Election," it said.

Persimmon has repeatedly warned the election may cause a slowdown in sales as potential buyers hold off purchases to see what policies a new government will adopt. Recent statistics from the Bank of England showed mortgage approvals fell for the third month in a row in February as the market endured a slow start to 2010.

But Persimmon said it has opened 50 sites so far this year, meaning it operates from about 375. It plans to open another 40 sites by July, which it said will help it improve prices and maintain sales momentum. It has also continued to invest in new land, acquiring some "excellent" sites.

Net debt has fallen to 265m, compared with 270m at the end of 2009 and 680m a year ago.

Analyst Rachael Waring at Panmure Gordon said Persimmon could make further write-backs on the value of its land.

"There is no comment on write-backs at this stage, but with prices having edged up in the first quarter, we believe it would not be any surprise if they featured at the interim stage," she said.

Analyst Anthony Codling at JP Morgan Cazenove said Persimmon's continued land buying is a positive sign. "It is our view that a housebuilder does not open new sites, or seek to buy new land unless it is reasonably confident about market conditions," he said.

"Whilst mortgage approvals for house purchase have been mildly disappointing in January and February, we believe this masks the fact the use of shared equity schemes is allowing the UK housebuilders to gain market share offering obvious attractions to 'deposit poor, cashflow rich' first-time buyers."