Persimmon builds fewer homes in the first half

Published:  07 July, 2011

YORK: Persimmon, one of Britain's largest housebuilders, completed 4439 homes between January and June, 281 less that the same period last year but expects a second half recovery to reach the same tally as last year.

But it warns "any meaningful increase in industry output will only occur with a significant improvement in the currently constrained mortgage lending conditions".

Chief executive Mike Farley said: "It's not affordability, that's the issue, it's the fact that [first-time buyers] haven't got deposits. People have been used to finding a 5% deposit. We're just trying to get back to the status quo situation ... In most parts of the country it's cheaper to buy a home than rent it." He said it was now possible to get "reasonable [mortgage] rates nearer 80%."

Persimmon has received the largest allocation from the Government under the FirstBuy scheme aimed at helping first-time buyers. Farley said the company will be able to help 2100 first-time buyers, and expects the scheme to be as popular as the Labour government's HomeBuy Direct scheme.

Persimmon's average selling price fell to £162 000 in the first half from £168 936 a year ago because the company built more smaller homes. It expects the average price to rise towards £170 000 for the full year, having secured more orders for detached houses.

Profit margins improved to 9% from 8% but are still a long way off the 15-17% the housebuilder enjoyed prior to the financial crisis.

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