Persimmon sees sustainable homes growth

Persimmon, one of the UK's biggest housebuilding groups, forecast no return to the unsustainable boom of the 1980s as the strong housing market in the South-east ripples out across the UK.

The group said areas of the country south of Leicester had picked up over the past 12 months, with inner London very buoyant, and this strength had started to spread out into the north of England and Scotland.

New house prices were rising at around 5 to 7 per cent in the South and around 3 per cent in the North, according to John White, chief executive. He described this as "sustainable, steady progress" quite unlike the boom of the 1980s.

Although numbers of visitors through the company's show houses had not gone up, he said the quality of the purchasers had improved, with a higher level of conversions and an increased ability to complete quickly, involving fewer part-exchange contracts.

Persimmon revealed that completions and reservations for the year to date are already up 10 per cent at 5,963 units.

Duncan Davidson, chairman, said concerns ahead of the election and the Budget had almost all evaporated. "Without wanting to be too complacent, we are optimistic on the back of the political situation since the Budget, and the Government does seem to recognise that the private house market is very important to a lot of people."

However, there was a warning that the increased demand had pushed up labour rates for bricklayers and the like by as much as 10 per cent in some areas over the past six months.

Persimmon's general confidence emerged as it reported a 110 per cent rise in pre-tax profits to pounds 23.3m for the six months to June, boosted by the pounds 177m purchase of Ideal Homes from Trafalgar House last year. The company said it could not split out the contribution from Ideal, whose rationalisation led to pounds 3.1m of exceptional costs in the previous period, but put the underlying rise in sales - which were up from pounds 203m to pounds 256m - at 10 per cent. The half-way dividend is being hoisted 6.7 per cent to 3.2p.

Persimmon sold 3,194 houses in the period, 18 per cent more than in the first half of 1996, at an average price which rose from pounds 75,000 to just short of pounds 80,000. Forward sales to be completed in the second half are currently being made at an average of pounds 83,000 and brokers expect total completions for the year to reach 6,600.

Mr Davidson refused to comment on whether he was interested in Fairclough Homes, but said the company was still looking for more acquisitions. He did say that existing operations were likely to be expanded in Scotland, the West Midlands and Kent.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Life and Style
Powdered colors are displayed for sale at a market ahead of the Holi festival in Bhopal, India
techHere's what you need to know about the riotous occasion
Arts and Entertainment
Larry David and Rosie Perez in ‘Fish in the Dark’
theatreReview: Had Fish in the Dark been penned by a civilian it would have barely got a reading, let alone £10m advance sales
News
Details of the self-cleaning coating were published last night in the journal Science
science
News
Approved Food sell products past their sell-by dates at discounted prices
i100
News
Life-changing: Simone de Beauvoir in 1947, two years before she wrote 'The Second Sex', credited as the starting point of second wave feminism
peopleHer seminal feminist polemic, The Second Sex, has been published in short-form to mark International Women's Day
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Evening Administrator

£8 per hour: Recruitment Genius: This Pension Specialist was established early...

Guru Careers: Executive Assistant / PA

£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...

Ashdown Group: Graduate Application Support Analyst

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Reach Volunteering: External Finance Trustee Needed!

Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

Day In a Page

Homeless Veterans campaign: Donations hit record-breaking £1m target after £300,000 gift from Lloyds Bank

Homeless Veterans campaign

Donations hit record-breaking £1m target after huge gift from Lloyds Bank
Flight MH370 a year on: Lost without a trace – but the search goes on

Lost without a trace

But, a year on, the search continues for Flight MH370
Germany's spymasters left red-faced after thieves break into brand new secret service HQ and steal taps

Germany's spy HQ springs a leak

Thieves break into new €1.5bn complex... to steal taps
International Women's Day 2015: Celebrating the whirlwind wit of Simone de Beauvoir

Whirlwind wit of Simone de Beauvoir

Simone de Beauvoir's seminal feminist polemic, 'The Second Sex', has been published in short-form for International Women's Day
Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Why would I want to employ someone I’d be happy to have as my boss, asks Simon Kelner
Confessions of a planespotter: With three Britons under arrest in the UAE, the perils have never been more apparent

Confessions of a planespotter

With three Britons under arrest in the UAE, the perils have never been more apparent. Sam Masters explains the appeal
Russia's gulag museum 'makes no mention' of Stalin's atrocities

Russia's gulag museum

Ministry of Culture-run site 'makes no mention' of Stalin's atrocities
The big fresh food con: Alarming truth behind the chocolate muffin that won't decay

The big fresh food con

Joanna Blythman reveals the alarming truth behind the chocolate muffin that won't decay
Virginia Ironside was my landlady: What is it like to live with an agony aunt on call 24/7?

Virginia Ironside was my landlady

Tim Willis reveals what it's like to live with an agony aunt on call 24/7
Paris Fashion Week 2015: The wit and wisdom of Manish Arora's exercise in high camp

Paris Fashion Week 2015

The wit and wisdom of Manish Arora's exercise in high camp
8 best workout DVDs

8 best workout DVDs

If your 'New Year new you' regime hasn’t lasted beyond February, why not try working out from home?
Paul Scholes column: I don't believe Jonny Evans was spitting at Papiss Cissé. It was a reflex. But what the Newcastle striker did next was horrible

Paul Scholes column

I don't believe Evans was spitting at Cissé. It was a reflex. But what the Newcastle striker did next was horrible
Miguel Layun interview: From the Azteca to Vicarage Road with a million followers

From the Azteca to Vicarage Road with a million followers

Miguel Layun is a star in Mexico where he was criticised for leaving to join Watford. But he says he sees the bigger picture
Frank Warren column: Amir Khan ready to meet winner of Floyd Mayweather v Manny Pacquiao

Khan ready to meet winner of Mayweather v Pacquiao

The Bolton fighter is unlikely to take on Kell Brook with two superstar opponents on the horizon, says Frank Warren
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable