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Persimmon profits leap 13% as Help To Buy boosts demand

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  • 21/08/2018
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Persimmon profits leap 13% as Help To Buy boosts demand
Persimmon has reported a 13% rise in profits to £516m in the first half of 2018, as the housebuilder reaps the benefits of the government-backed Help To Buy scheme.

 

Revenue at the group jumped 5% to £1.84bn, as completed sales lifted 4% to 8,072 homes.

Selling prices for Persimmon homes increased by an average 1% to £215,813.

Last year chief executive Jeff Fairburn came in as the highest paid FTSE 100 chief executive, scooping a bumper pay packet of £47m in 2017.

Persimmon said low mortgage and interest rates, as well as high employment has helped boost the market.

The government Help To Buy scheme, which provides new build buyers with an equity loan to use as part of their deposit has also helped to stimulate demand.

Ed Monk, associate director from Fidelity Personal Investing’s share dealing service, said: “Persimmon bosses have a lot to thank the Help to Buy scheme for.

“Almost half the homes it sells are reportedly with a Help to Buy mortgage and the demand the scheme creates is one of the reasons that prices for first-time buyer homes are rising faster than for other properties, and why first-time buyer numbers remain strong while the rest of the market slows.

“Persimmon is in the sweet-spot of the housing market right now – selling to buyers where demand is strong in areas of the country where prices are still rising.”

The housebuilder said it is investing to improve capacity and new home volumes, with greater use of offsite manufacturing capability.

Chariman Roger Devlin said: “The development of government policy and its effect on the UK economy, and the housing market more directly, will play an important role in helping to create future market conditions that will allow the industry to continue to increase the delivery of newly built homes.”

Chief executive Fairburn added: ” We have continued to experience good levels of customer interest in our housing development sites as we trade through the quieter summer season.

“Customers are continuing to benefit from a competitive mortgage market and confidence remains resilient based on healthy employment trends and low interest rates.

“Our forward sales are 6% ahead of last year at £2.12bn which places the group in a strong position for the second half of the year.”

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