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UK's Persimmon's forward sales rise 9% from pre-pandemic levels

Stock MarketsAug 18, 2021 07:51
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© Reuters. FILE PHOTO: Builders construct modular Space4 homes on a Persimmon development in Coventry, February 22, 2017. Picture taken February 22, 2017. REUTERS/Darren Staples/File Photo

(Reuters) - Persimmon (LON:PSN), Britain's No. 2 homebuilder, said on Wednesday current forward sales are up about 9% from pre-pandemic levels, allaying some fears of a cooling housing market after the partial removal of a temporary tax break.

The company said its current forward sales position stood at 2.23 billion pounds ($3.06 billion), compared with 2.48 billion pounds in the COVID-19 pandemic-hit 2020 period and 2.05 billion pounds in the comparable period in 2019.

As part of a forward sale, a buyer and the builder enter into a purchase and sale agreement for a fixed date.

A more than year-long tax holiday expiring in September, cheap loans, and a preference for larger homes have all boosted the UK's housing market and sustained demand for homes, although some data has pointed to a cooling in the sector recently.

The FTSE 100 firm also said that despite experiencing increased cost inflation related to certain components of the supply chain, it currently expects its "industry leading returns to remain resilient".

Persimmon's bigger rival Barratt Developments (LON:BDEV) and No.3 player Taylor Wimpey (LON:TW) have forecast robust housing demand even after the expiry of the tax holiday.

The company's pre-tax profit for the six months ended June 30 was at 480.1 million pounds, compared with 292.4 million pounds in 2020 and 509.3 million pounds in the year earlier.

($1 = 0.7276 pounds)

UK's Persimmon's forward sales rise 9% from pre-pandemic levels
 

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