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Persimmon new home completions fall by over a third YOY

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  • 07/11/2023
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Persimmon new home completions fall by over a third YOY
Homebuilder Persimmon’s new home completions have decreased by around 37 per cent year-on-year to 1,439 in Q3 this year.

According to its latest results, this includes 1,234 private homes and 205 partnerships homes for housing association partners. This is a fall from 1,894 and 376 in the same period last year respectively.

The group added that its current forward sales position came to £1.62bn for Q3, which is a fall of 23 per cent compared to the same period last year.

The firm continued that net private sales per outlet stood at 0.48 for the period, which is a decrease from 0.63 last year.

Persimmon said that trading during the period followed a typical seasonal drop in the summer months but then picked up in September.

On the pricing side, the housebuilder said that its private selling price on completions rose by two per cent in the quarter to £296,822 compared to the same period last year.

For partnerships, the average selling price jumped by 20 per cent year-on-year which the firm attributed to a higher weighting of completions in the South compared to last year.

The group added that average incentives on average sales rose to around 3.6 per cent.

Persimmon said that it was on track to deliver around 9,500 completions for this year, with operating profit in line with expectations.

“On the whole pricing remains broadly stable although we have seen a slight reduction in Group private average selling price in the forward order book and an increase in the use of incentives, particularly in the South where affordability constraints are greater,” it added.

The company said sales had improved over the last five weeks to 0.59, with a pick up in investor sales.

It added that it expected investor sales to make up five per cent of its full-year delivery.

 

Persimmon: ‘Uncertain conditions for 2024’

Persimmon said that looking ahead for 2024 it expected “market conditions will remain highly uncertain” but said it “well positioned with our focus on delivering high quality sustainable homes” at an affordable price.

The company added that it had a number of new sites progressing through the pipeline with plans to open around 30 gross new selling outlets next year.

“The longer-term fundamentals for the market remain positive. We have a proven track record of delivering strong returns through the cycle and our good progress in improving our key quality and service capabilities will allow us to respond quickly when conditions improve,” it said.

Dean Finch, Persimmon’s group chief executive, said: “While the near term is likely to remain challenging and we remain disciplined on costs, we continue to position the business for growth when the market recovers, as demonstrated by our further progress on planning in the period.

“The group’s national network of outlets providing a high-quality product at a range of attractive prices is a crucial strength in this market.”

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