Persimmon positive on future growth despite tough market

 
Kasmira Jefford
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HOUSEBUILDER Persimmon yesterday warned that the housing market continues to be challenging with mortgage availability the key constraint, but it was optimistic of future growth.

In a third quarter update, the group said weekly sales rates were around four per cent higher on the previous year, down slightly from the five per cent reported in its half year results at the end of August.

Visitor levels to its sites have been roughly six per cent ahead of last year from the start of the autumn season and cancellation rates continue to run at historically low levels of around 20 per cent, the company said.

It added that the cost of mortgages had eased slightly as lenders access the government’s Funding for Lending Scheme and take-up of the government’s NewBuy scheme was “gradually improving” as a result.

“To date we have supported over 450 customers to purchase a home with a NewBuy mortgage,” Persimmon said.

Prices have been stable during the period and the company expects sales prices to increase by around five per cent to £172,000 for the full year compared with £163,999 last year.

The FTSE 250 company reiterated that it expects to return to underlying operating margins in the range of 15 per cent to 17 per cent in the medium term.