Persimmon ups guidance amid ‘encouraging’ Labour planning reforms

Persimmon says it will build about 10,500 homes this year, at the top end of previous forecasts, and said it has already seen a pickup in activity over the summer amid Labour’s planning reforms.

The housebuilder said it finished 4,445 new homes in the six months to June 30, up by 5% against the same period last year.

It also marks a turnaround from the first quarter, when new home completions were down 10% year-on-year.

The London-listed firm said it got planning permission for 6,000 more plots so far, with “encouragingly” 1,000 of those completed in July, after Labour won the General Election.

It said it has “already started to see some positive momentum” from Chancellor Rachel Reeves’ proposed planning reforms.

“Achieving implementable planning permissions has been a challenge across the industry in recent years. We welcome the new government’s proposals to address this,” it said.

“Although we recognise that the government’s welcome planning reforms will take some time to come through, our ambition remains to grow our outlet base to over 300 in the medium term.”

Last month, Ms Reeves said the national planning policy framework will be reformed.

The policy will include restoring mandatory housebuilding targets for local authorities as part of the drive to build 1.5 million homes over five years, which is expected to help builders.

Meanwhile, Persimmon said it had seen increased buyer confidence over the summer, which it expects to improve after the Bank of England cut the base interest rate in early August.

Since the start of July, its net private sales rate is 0.69, up 68% on last year, giving the firm “good confidence” on completing 10,500 new homes this year.

Persimmon’s average selling price was £263,288 for the first half, up 2.7%, pushing revenue up 11% to £1.32 billion for the period.

Profit was roughly flat at £152 million while its current private forward order book is up 28% at £1.12 billion.

Dean Finch, chief executive of Persimmon, said: “The first half of the year has been strong with improved sales rates and robust average selling prices, despite ongoing affordability challenges.

“Strengthening consumer sentiment, improving macro-economic conditions and the government’s welcome and ambitious planning reforms that demand more of the high quality, affordable homes that are Persimmon’s core strength, are all supportive of our ambition to grow this year and in the future.

“We are opening more sites this year and will do the same next year, demonstrating the benefit of our continued land investment in recent years.

“This growing and strong platform means we are ready to deliver more of the homes our country requires while securing industry-leading returns over the medium term.”