Persimmon holds back on land acquisition

by: Heather Greig-Smith
  • 03/11/2016
  • 0
Persimmon holds back on land acquisition
Housebuilder Persimmon has reported strong trading in the third quarter despite Brexit uncertainty, but said it is cautious about investing in new land.

In the immediate aftermath of the EU referendum, Persimmon said customer visits to its sites were up on the previous year and its private sales rate since late August has been ahead by 19%. The company reported that it has sold all its 2016 stock and has forward sales of £757m reserved beyond this year, up 4% from £726m last year.

The housebuilder pointed to “resilient consumer confidence and strong lender support” as key factors. “The reduction in the bank base rate in August has resulted in more attractive mortgage products further supporting affordability. Mortgage interest rates remain compelling, especially for first time buyers utilising the Help to Buy shared equity scheme,” it said.

However, the statement was not bullish on the subject of land acquisition. “We recognise that the uncertainty surrounding the potential impact of the EU referendum result on the UK economy may continue for some time. Therefore, we remain cautious with respect to new land investment but have continued to progress attractive opportunities on a selective basis,” it said.

The company has acquired 7,580 new plots of land in the three-month period to 1 November at a cost of £116m including payment of deferred land creditors. It added that it continues to focus on converting strategic land into residential consent and has so far launched 102 sites in the second half of the year, with a further 45 expected before 2017.

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