The Week Ahead: Housebuilders Persimmon and Taylor Wimpey expect to post robust results
- Credit: Archant
Britain’s property market will be in sharp focus next week as two of the biggest housebuilders post annual figures after a solid year for the sector, despite a Brexit vote blip.
Attentions are turning to the prospects for 2017 as experts forecast house price growth will ease back, while builders are facing soaring costs from the weak pound.
Persimmon, which also owns the Charles Church brand, is first out of the stalls with its results on Monday, and is expected to report profits jumping by nearly a fifth over 2016 thanks to a surge in sales over the final six months.
Buyer demand and house prices have been surprisingly resilient since the EU referendum, thanks largely to rock-bottom borrowing costs.
In its last update, York-based Persimmon said the autumn selling season had seen robust sales reservations, boosted by readily available mortgage deals.
Analysts expect Persimmon to post a 19% hike in pre-tax profits to £756 million.
This will mark a slowdown on the 34% profits growth notched up in 2015, but Persimmon has hailed a strong performance over the second half of last year in the face of uncertain conditions caused by the Brexit vote in June.
- 1 Man dies after being found unresponsive in Sudbury river
- 2 Ipswich Town installed as early League One title favourites
- 3 14 players that could solve Town's left-sided problem
- 4 'We're blown away' - Classic car show visits care home after roadworks setback
- 5 Historic former pub with permission to convert into homes set for auction
- 6 Homes destroyed after blaze breaks out in terraced housing
- 7 5 new places to eat and drink in Woodbridge this year
- 8 Man left with head injury after attack in seaside town
- 9 GALLERY: 'Stunning' turnout as Hadleigh Show returns after enforced break
- 10 Motorists stopped for speeding during enforcement checks
It legally completed the sale of 15,171 homes in 2016 - up 4% - while group revenues lifted 8% to £3.14 billion.
Legal completions rose 9.6% to 7,933 in the second half, while its private sales rate was 15% higher year on year.
Robust results are also expected from Taylor Wimpey, which reports on Tuesday, after the group said in January profits were expected at the upper end of market forecasts.
Taylor said home completions rose 4% in 2016, but it was the eye-catching 11% rise in average selling prices to £255,000 that stood out.
Analysts at Jefferies are pencilling in a 21% leap in pre-tax profits to £728.3 million.
They said: “The group is unfazed by the uncertainty in the wider economy and remains on track to meet its three-year targets.”
The City will be watching outlook comments closely, though, after recent housing sector reports suggested price rises are slowing.
The Halifax index showed house prices dipped for the first time in five months in January - down 0.9% month on month.