Selling price and sales dip at Persimmon

City A.M. Reporter
BRITISH housebuilder Persimmon yesterday said its sales had slipped in the first six months of the year but expressed optimism about the prospects for the housing market.

The company said it sold 4,439 homes in the first half of 2011 compared to 4,659 a year earlier, a drop of five per cent.

Revenues also dipped to £715m compared to £785m a year earlier, the firm said in a trading update.

Its average selling price took a knock, falling four per cent to £162,000, although the company said it would push this up in the second half when it expects to complete the sale of more expensive detached houses.

Britain’s biggest housebuilder by volume said it expects a recovery in sales in the second half of the year, after private sales reservations rose six per cent year-on-year in the past 10 weeks.

“We’ve seen a fairly stable market, and we’ve seen a continuation of improvement of our level of sales since the start of the year,” Persimmon chief executive Mike Farley said.

But tight credit conditions remain a thorn in the side of an industry that has seen housing output in the UK shrink to record lows, prompting lenders and housebuilders to get together to thrash out solutions.

“The discussions are at any early stage, but the good thing about it, is that it’s been recognised by the lenders that it’s a 95 loan-to-value product that is required,” said Farley. “The difference now is that there is a genuine will from the lenders to come up with a solution to this issue.”

Persimmon said it continued to look to higher profitability and added it was generating good cash that would let it invest.