Persimmon, one of the UK’s biggest housebuilders, has just released its half-year results and things are looking pretty good. This could be a sign that the housing market is finally turning a corner after a tough couple of years.
Persimmon built 4,445 new homes in the first six months of this year, a 5% increase on last year. They’ve also seen a massive jump in private home sales, up 14% to 3,742 homes. This is a clear indication that people are getting back into the market.
The Big Picture
Persimmon is on track to build a total of 10,500 homes this year, which is at the top end of what they originally expected. They’ve got a huge backlog of orders too, with the private order book up a whopping 28% to £1.12 billion. This means they’re already lined up to build lots more homes in the future.
Planning Permission Boost
The company has also managed to get planning permission for a massive 6,000 plots this year. This is even better than last year and they’re particularly happy that 1,000 of those permissions came through in July since the new government took over. This means they’re now even better placed to build more homes going forward.
Prices on the Rise
The average price of a new Persimmon home is now £263,288, compared to £256,445 last year. This is another good sign for the company, as it shows that buyers are still willing to pay a decent price for a new home.
Experts See a Positive Trend
Industry experts are also upbeat. Richard Hunter from Interactive Investor says that Persimmon is in a great position to benefit from the improving market. He points out that the cost of building materials is now stabilising after a sharp rise a few years ago, which is good news for the company’s profits.
He’s also pleased with the new government’s focus on making it easier to get planning permission for new homes. This should help Persimmon to build even more homes in the future.
Charlie Huggins from Wealth Club is also optimistic. He says that the housing market is starting to show signs of recovery, with interest rates finally coming down and mortgage rates getting cheaper. He also points out that the new government is pro-housing, which is good for the sector.
A Word of Caution
However, he does warn that the global economy is still a bit uncertain. If things get worse, banks might become more cautious about lending money for mortgages, which could slow down the housing market again. But for now, things are looking up.
Persimmon’s Strong Performance
Overall, it’s clear that Persimmon is in a strong position to capitalise on the improving housing market. They’re building more homes, selling them at good prices and are confident about the future. This could be a good time for investors to take a closer look at the company and consider adding it to their portfolio.