Persimmon said it was continuing to win market share and grow volumes amid a challenging market and reaffirmed its full-year guidance in a steady update to the market.
The housebuilder, heavily geared towards first-time buyers, posted numbers that were dramatically better than its peer Taylor Wimpey that reported earlier this week.
Persimmon’s private sales rate edged up to 0.79 homes per outlet per week from 0.76, while planning approvals in the first nine months jumped 12%.
Private forward sales rose 3% to £2.15bn, and the company remains on track to build around 12,500 homes this year, with more than three-quarters of expected private completions already sold.
“Persimmon delivered a set of results which provide solid foundations for the company to hit its full-year expectations. An increase in sales is an impressive achievement given how difficult the market backdrop is and Persimmon seems to be making a better fist of things than some of its rivals,” explained AJ Bell investment director Russ Mould.
Average selling prices in the order book rose 2% to about £301,900, though sales incentives held at around 5%, a reminder of the softer conditions in the UK housing market.
While Persimmon expects to keep growing volumes in 2027 on the back of its land pipeline and outlet expansion, it warned that cost inflation of £30m-£40m and higher financing costs would “limit near-term profit progression”.
“Higher borrowing costs are unhelpful to say the least to the property market and, while the state backed Your First Home scheme is a welcome boost, the Budget revealed it isn’t coming until April,” Mould added.
“This could potentially delay demand as first-time buyers wait for its launch before making their property purchase.”
Nonetheless, the market seemed happy with the update, and Persimmon shares rose 6% on Thursday.