What election? Persimmon shares have shot up after it revealed "excellent" sales in the first half

 
Emma Haslett
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Construction Industry Boosts Economy Despite Cap On Affordable Housing
Persimmon said it had "strong momentum" (Source: Getty)

Shares in housebuilder Persimmon jumped this morning after it shook off uncertainty from the general election, saying sales in its first half had been "excellent".

The figures

In a trading update today, Persimmon said revenues grew 12 per cent to £1.66bn in the first six months of 2017, with forward sales of £1.6bn, up 18 per cent on the same period last year.

The number of homes sold rose by 556 on last year, while average selling price edged up 3.5 per cent to £213,000. Legal completions rose eight per cent to 7,794.

The housebuilder spent £370m on 47 new land deals in the first half, with space for 9,300 new homes.

It also took the opportunity to confirm the additional payment under its capital return plan, announced in February, under which it will return an extra 25p per share (a total of £77m) to shareholders, meaning it expects to return £2.85bn to shareholders by 2021.

Shares rose three per cent to 2,361p in early trading.

Why it's interesting

Various house price indices have suggested the general election caused untold pain for those in the property market, but Persimmon seems to have been immune. The company said today the market had taken the snap election "in its stride" (although the National Association of Estate Agents may beg to differ).

The UK's housing sector was hit twice last year after then-chancellor George Osborne hiked stamp duty on buy to let homes, which was followed more or less immediately by uncertainties around Brexit.

But although housebuilders' share prices took a hit, they have, for the large part, recovered: Persimmon's shares are currently almost 90 per cent higher than they were the day after the Brexit vote, and 25 per cent higher than their pre-referendum peak.

But there are signs the market may be beginning to cool. A house price index published at the end of last month by online property portal Rightmove suggested prices had fallen in June for the first time since 2009. Given June is traditionally the month house-hunters start pounding the pavements, that's a bad sign.

Still, Persimmon was optimistic, saying it had "strong momentum moving into the second half of the year".

What Persimmon said

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.

We remain fully committed to building the new homes needed by communities right across the UK. Our focus on building traditional family housing in attractive locations will help meet unfulfilled demand from first time buyers and home movers. We are confident in the group's future prospects.

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