Persimmon aims for a ‘great year’ amid booming UK property market.
Persimmon expects to achieve even better financial returns than last year.
Persimmon has reported a bumper year, with weekly sales up a fifth in the second half of 2021 compared with pre-pandemic levels, thanks to a booming housing market driven by cheap mortgage deals and a stamp duty holiday.
The UK’s largest homebuilder by market value said in a business update that revenue rose 8.4% last year to £ 3.610 million as it completed the sale of 14,551 homes, almost 1,000 more than in 2020, as the median home price increased from £ 230,534 to £ 237,050 year-over-year.
However, Persimmon said the spread of the Omicron variant has increased absenteeism related to the disease, with some clients delaying moving to new homes to follow the government’s isolation advice.
“While the industry continues to face ongoing operational and economic challenges as a result of the pandemic, particularly as the Omicron outbreak unfolded in the last six weeks of the year, the group continues to handle these ongoing challenges comprehensively,” he said. Dean Finch, Persimmon’s CEO. “The long-term fundamentals of the UK property market remain strong, and I am confident.”
The company responded to government plans to force homebuilders to pay to repair faulty siding after the Grenfell fire. However, Persimmon said it had built only a “tiny proportion” of the affected buildings.
“We share the secretary of state’s aspiration that renters should not have to pay to remove the siding,” the company said. “In fact, a year ago, we committed that tenants of buildings constructed by Persimmon, including all those over 11 meters, should not have to cover the cost of removing the cladding.
“We have built only a tiny proportion of buildings affected by this problem. Like the rest of the home construction industry, we will soon start paying the siding fee announced in the budget. ”
The company previously said that 26 of the buildings had defective cladding.
Along with its peers, the FTSE 100 company has benefited from the pandemic-driven housing boom in the UK as home buyers tried to take advantage of the government stamp tax holiday, which ended last October, the historically low borrowing costs and the “race for space” trend as it rises. In flexible and remote work it drove an increase in buyers looking for properties in more rural and picturesque locations.
Persimmon said that inquiries about buying homes “remain encouraging” despite the end of government support schemes, and that demand continues to outpace supply.
However, the company said its order book of £ 1.62 billion as of December 31 is slightly less than £ 1.69 billion in 2020, although it is up from £ 1.36 billion in 2019.
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