House sales treble
HOUSEBUILDER Persimmon today reported a 70% drop in half-year profits but added forward sales in the North East had trebled since the start of the year.
The firm, parent company of Newcastle-based Persimmon Homes North East and County Durham-based Persimmon Homes Teesside, posted a pre-tax profit of £9.8m for the six months to June 30, down from £36.9m in the same period last year, although this included a positive re-evaluation on the value of its land, which had suffered a 20% write down provision the previous year. Stripping this out, the firm posted a loss of £18.1m.
Total sales were £623m, a reduction of 37.6% on the same period last year.
During the period Persimmon completed on 4,006 units, down from 5,501 a year ago with an average selling price of £155,524, compared to £181,485 12 months earlier.
However David Jenkinson, regional chairman of Persimmon Homes North East region, said the increased level of sales activity encountered in the first quarter of 2009 had continued, and strengthened throughout the year to date.
“It is of significant note that our forward sales as at July 1 are approximately three times greater than our forward order book as at January 1, which provides a great indicator of the improvements within the housing market,” he added. “It is clear that house prices have stabilised over recent months and many prospective purchasers are coming back into the market as they see that properties have reached a price level where they represent great value for money.
“Our wide geographic spread covering 39 sites throughout the North-east region has placed us in a position where we are well placed to benefit from any upturn in the market.”
Meanwhile Barratt Homes has also said the North-east housing market is showing positive signs of improvement. The housebuilder is launching three new sites in coming months, bringing its total of current developments in the region to 20 - the most since 2006.
“There are definitely signs of life in the local housing market,” said Bernard Rooney, managing director at Barratt North East.
“Customer confidence has improved over the past six months and we have seen a marked increase in sales inquiries and visitor levels.”
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