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Persimmon shrugs off Brexit fears as house sales rise 19%

Published 02/11/2016

Persimmon said it has around £757 million of forward sales reserved beyond 2016
Persimmon said it has around £757 million of forward sales reserved beyond 2016

Housebuilder Persimmon has reported a buoyant third quarter, brushing aside Brexit fears in the process.

The group said its private sales rate in the period was 19% ahead of last year and that the firm is "fully sold up" for the current year.

Persimmon added that it has around £757 million of forward sales reserved beyond 2016, an increase of 4% compared with last year.

The company described trading in the weeks following Britain's decision to quit the European Union as "encouraging", adding that customer activity strengthened at the start of autumn.

To cement the progress and meet demand, Persimmon plans to open a new brick factory in Doncaster, South Yorkshire, which will be commissioned in the first quarter of 2017.

The company said: "The market has continued to benefit from resilient consumer confidence and strong lender support.

"The reduction in the bank base rate in August has resulted in more attractive mortgage products further supporting affordability."

Persimmon and its listed rivals saw shares surge after the Bank of England slashed interest rates to 0.25% from 0.5% in August.

However, it added that it remains cautious with respect to new land investment in light of the uncertainty unleashed by the potential impact of the EU referendum.

Shares were up 1% in morning trading, with experts saying housebuilders have a "licence to print money".

Neil Wilson, markets analyst, said: "Housebuilders seem pretty well insulated from Brexit and the initial post-referendum sell-off looks to have been an overreaction. The market is geared in their favour - huge demand from first-time buyers and a lack of supply - which they control.

"In fact being a housebuilder right now in Britain, with ultra-low interest rates and Help to Buy, is a licence to print money. A chronic shortage of housing means they can rely on rock solid demand whatever the economic conditions."

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