Persimmon results set to indicate the state of play in the housing market
- Credit: PA
The state of Britain’s housing market will again be brought into sharp focus this week when house builder Persimmon reveals its half year results.
While the group, along with its sector peers, has posted bullish figures since the Brexit vote, the market will be scouring Persimmon’s latest release for any signs of a slowdown.
The company updated on its six month sales performance in July, disclosing it had seen revenue grow 12% to £1.66 billion, while the average selling price of its homes rose 3.5% to around £213,000 and completion volumes increased 8% to 7,794 homes.
Graham Spooner, an investment research analyst at The Share Centre, is expecting another increase in turnover.
He said: “Just like many of its peers, we should see revenues climb by double percentage points on the back of increased completions and slightly higher average house prices.
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“However, commentary on current market activity will be keenly followed as concerns mount over the economic health of UK consumers.”
British households have seen their spending power come under sustained pressure from lacklustre wage growth and higher inflation on the back of the Brexit-hit pound, leaving fewer consumers willing or able to take the plunge into home ownership.
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A string of recent surveys from the likes of Nationwide, Halifax and the Royal Institution of Chartered Surveyors (Rics) have now “painted a gloomier picture” of UK house price growth, Latih Khalaf, a senior analyst at Hargreaves Lansdown, said.
The Rics report, which was released earlier this month showed UK house price growth slowing to a standstill, with a net balance of only 1% of surveyors reporting rising prices, down from 7% in June.
That was the weakest survey reading since March 2013.
“However, it must be said that the areas that seem to be creaking are at the very top end of the market, particularly in the South East.
“As a nationwide builder with an average selling price of under £230,000, Persimmon has limited exposure to these type of properties,” Mr Khalaf said.
“Add in the fact that a significant portion of demand comes from buyers using Help To Buy support, hopes will be high that demand for Persimmon’s new homes remains strong.”