Persimmon setting its sights high for 2010

Nov 17 2009 by Iain Laing, The Journal

HOUSEBUILDER Persimmon has said it expects to carry a “healthy“ order book into next year with orders for new homes up 50% on this time last year.

But the country’s second biggest housebuilder warned the market remained vulnerable because of the impact of higher unemployment and problems with mortgage availability.

The York firm, founded by Northumberland’s Lilburn Estates owner Duncan Davidson, said the summer’s encouraging sales trends were maintained during the autumn, with the average selling price of homes reserved since the start of July being 6% higher at £173,000.

Forward sales are also well ahead of last year, leading to the healthy order book, but Persimmon issued a note of caution in its trading update.

“While sales volumes have been consistent, we still have significant concerns regarding the availability of mortgages, particularly the higher loan to value products required by first time buyers,” the company said.

Persimmon is also concerned by the potential impact on its markets of any significant increase in unemployment over the coming months.

In August, the company posted pre-tax profits of £9.8m for the six months to June 30, down from £36.9 million in the same period last year, and yesterday it said it was in a strong position to open new outlets and purchase land when it becomes available.