Persimmon joins Bovis reporting signs housing market stabilisation

| August 25, 2009 | 0 Comments

Persimmon has joined Bovis Homes in reporting signs of stabilisation in the UK housing market, with selling prices holding their own across the UK and sales ahead of expectations during the summer months.

According to the group, the mortgage market and the downward pressure of valuations on prices have both shown signs of improvement, although mortgage availability remains a concern “particularly the scarcity of higher loan-to-value products”.

Recent visitor levels are ahead of last year’s and cancellation rates for the first six months of the year were down to around 16%, compared with 30% in the first half of 2008.

However, the builder achieved an average selling price of around £155,524 in the first half of 2009, compared with £181,485 a year earlier and legal completions for the period numbered 4,006 compared with 5,501.

The group, which is the UK’s biggest housebuilder by volume, has 64,347 plots of land with residential planning permission, representing around seven years’ supply of land.

Persimmon Group chairman, John White, says: “Future volume increases and price movements will be dependent upon mortgage availability, job prospects and the health of the general economy.”

He adds: “The recent introduction of the HomeBuy Direct shared equity scheme by the Government is gaining momentum … we are using this scheme to good effect and plan to continue with it.”

Persimmon posted a pre-tax profit of £9.8 million for the six months to June, compared with a profit of £36.9 million last year.

However, putting aside an exceptional gain of £27.9 million in relation to the value of its assets, the company made a loss £18.1 million.

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