Persimmon reports fall in house sales as economic uncertainty hits market

Persimmon has reported that sales have fallen for new build homes and cancellation rates have risen in Q3 as the UK property market enters a downturn. The FTSE 100-listed housebuilder confirmed in its latest trading statement that its weekly and forward sales rates had slumped since Q2. Over the past three months, Persimmon reported its average net private weekly sales rate per outlet for Q3 2022 was 0.60, down from 0.78 during the same time last year. The housebuilder completed 9,974 homes in the five months to 6 November, down from 10,728 a year earlier. The company noted that the government’s help-to-buy scheme ending had a role to play in its downfall in numbers, as the scheme accounted for 20% of Persimmon’s completions so far this year. Persimmon reported £0.77bn of forward sales reserved beyond the current year, compared with £1.15bn last year. However, it stuck to its forecast of between 14,500 and 15,000 completions for the year, even though the last six weeks have seen cancellation rates increase to 28% from 21% in the preceding 12 weeks from 1 July 2022, “introducing some uncertainty”. Persimmon also claimed is made good progress on build rates that are 20% ahead of the prior year. The housebuilder’s projected cash position is £700m at the end of the year, after a total capital return of £750m paid in 2022 to date. Persimmon group chief executive Dean Finch said: “Rising interest rates and broader economic uncertainty are clearly impacting mortgage lending and customer behaviour and this is reflected in our recent weekly sales rates and forward sales position.” He added: “We recognise how important sustainable returns are for our shareholders and today we are setting out a new capital allocation policy that balances this with the need to invest in our future success.” To send feedback, e-mail akanksha.soni@eg.co.uk or tweet @AkankshaEG or @EGPropertyNews Photo © Persimmon