Belfast Telegraph

Persimmon hails strong first half as sales rise in resilient property market

Housebuilder Persimmon said the property market took the snap General Election "in its stride" as the firm racked up another set of rising sales.

In a half-year trading update covering the year to June 30, the Charles Church group disclosed that revenue grew 12% to £1.66 billion, with the average selling price of its homes growing 3.5% to around £213,000.

"We have continued to experience good levels of customer demand since the group's AGM trading update on 27 April 2017, with the market taking the snap UK General Election in its stride.

"Consumer confidence remains resilient and compelling mortgage rates continue to offer good support to new home-buyers," Persimmon said.

Completion volumes rose 8% to 7,794 homes in the period, with total forward sales valued at £1.6 billion, an increase of 18% compared with last year.

Persimmon added that it expects the strong trading seen in the first six months of 2017 to lead to progress in its operating margin, exceeding "comfortably" the 25.7% delivered in the second half last year.

The firm added: "Successful execution of the long-term strategy launched in 2012 has placed the group in a very strong financial position, with an excellent asset platform designed to position Persimmon for success through the housing cycle."

The update comes after Halifax last month reported a slowdown in the housing market when Prime Minister Theresa May's calamitous decision to call a snap election led to increased uncertainty among house-buyers.

Persimmon shares rose over 3% in morning trading to 2,359p.

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said while momentum continues to build, the prospect of rising interest rates "remains something of a bogeyman".

But he added: "It looks highly unlikely that interest rates are going to rise rapidly, and we think households should be able to stomach a return to the 0.5% base rate we saw before the referendum pretty comfortably.

"In any case, Persimmon's geographic diversity and relatively low exposure to London and the South East means it's less exposed to the areas where affordability has become most stretched and a rise in mortgage rates would be most damaging."

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