Shares take off as builder's profits leap 34pc

The York-based firm, now Yorkshire’s biggest PLC following Morrisons’ demotion from the FTSE 100, also reported a good start to 2016 with the spring selling season seeing a 13 per cent improvement as measures such as Help to Buy, strong consumer demand and record low interest rates boosted sales.

The group’s CEO Jeff Fairburn said: “Affordability is good. People have got jobs and if they can buy a house they do.

“Help to Buy is a very important factor. It’s very supportive and 2016 sales have been strong.

“We’ve got a lot of new sites - we opened 250 last year - and that’s helping. They are in good locations. We are maintaining affordability - our average selling price is still under £200,000.”

Shares in the group rose 56p to 2,029p and Persimmon is to reward investors with a cash return of 110p a share.

Analyst Robin Hardy at Shore Capital said: “Persimmon’s 2015 results have run out ahead of consensus with an underlying pre-tax profit of £634m against our estimate of £610m and consensus of £608m. Revenues are as guided but gross margins are materially higher than expected at 25 per cent.”

Charlie Campbell at Liberum said the results were better than expected, but warned that the referendum on Britain’s European Union membership could hit the housing market, albeit temporarily.

“It would be reasonable to assume some slowing of sales ahead of that date due to general uncertainty, regardless of the eventual outcome,” he said.

“Houses are, after all, high-ticket items and the timing of purchases can be somewhat discretionary. We would expect uncertainty to pass after the event, so any disruption to sales is likely to prove relatively short-lived.”

Mr Fairburn said the run up to any election creates uncertainty, but he wasn’t overly worried.

“Our experience in the last General Election and the Scottish referendum was the impact was very minimal,” he said.

“The average guy on the street doesn’t think the EU question affects him greatly. If he can afford to buy he’s not going to delay because of the referendum.”

Persimmon, which trades as Persimmon Homes, Charles Church and Westbury Partnerships, completed eight per cent more homes last year, totalling 14,572, with the average price rising by 4.5 per cent to £199,127. Revenues rose 13 per cent to £2.9bn.

The group said it sold 6,100 homes through Help to Buy in 2015.

The Government’s Help to Buy programme enables purchases by buyers with deposits of only five per cent, while it is also launching the Starter Homes initiative, which subsidises discounts of at least 20 per cent for first-time buyers on newly-built properties.

Persimmon said forward sales were 12 per cent ahead at £1.68bn.

“We are very pleased with where we are and very confident about the future,” said Mr Fairburn.