Persimmon has strengthened its housebuilding forecasts for the year, saying it has been encouraged by the new Labour government’s planning reforms.
The company, which is one of the UK’s largest housebuilders, said its outlook was already being bolstered by improving consumer confidence, having seen a rise in visits by potential buyers.
That trend is expected to continue after the Bank of England’s rate cut last week, which brought the base rate down from to 5% from 5.25% and will help reduce mortgage costs for prospective homeowners.
Persimmon suggested its housebuilding rates would also benefit from planning reforms announced by Labour shortly after the party’s general election victory last month, in which ministers pledged to reintroduce mandatory housing targets, and take swift action to clear bureaucratic backlogs to boost housebuilding across the UK.
“We are encouraged by the early announcements of the new government, particularly around planning,” the company said as it released half-year earnings on Thursday.
“Although we recognise that the government’s welcome planning reforms will take some time to come through, our ambition remains to grow our outlet base to over 300 in the medium term,” the company said, referring to large sites or fields for developments.
The housebuilder said it had “good confidence” it could deliver about 10,500 homes this year, which was at the top end of its previous guidance.
It completed 4,445 new homes in the first half of the year, representing a 5% rise on the same period last year. It included a 14% increase in private home completions to 3,742 homes.
Data released by Halifax on Wednesday also showed that UK house prices increased by 0.8% in July compared with the previous month, and rose by 2.3% year on year – the best rate since January.
Research published on Thursday by the Royal Institution of Chartered Surveyors found that expectations for a house sales increase over the next few months have reached their strongest levels since January 2020, with a net balance of 30% of property professionals expect sales to rise over the next three months rather than fall.
“The first half of the year has been strong with improved sales rates and robust average selling prices, despite ongoing affordability challenges,” the Persimmon chief executive, Dean Finch, said.
“Strengthening consumer sentiment, improving macro-economic conditions and the government’s welcome and ambitious planning reforms that demand more of the high-quality, affordable homes that are Persimmon’s core strength, are all supportive of our ambition to grow this year and in the future.”
after newsletter promotion
Separately, Britain’s competition regulator said on Thursday that its review into Barratt’s £2.5bn deal to buy the smaller housebuilder Redrow had raised concerns around one Barratt development in Whitchurch, which includes nearby towns such as Nantwich, Ellesmere and Market Drayton.
The Competition and Markets Authority (CMA) offered Barratt, which is the country’s biggest housebuilder, and Redrow the opportunity to submit proposals to address its concerns.
The companies hold a high combined share of land in the catchment area centred around the Barratt development at Tilstock Road, with the addition of Redrow’s development at Kingsbourne in Nantwich, the regulator said.
“If the deal goes ahead, the CMA found that it could lead to higher prices and lower quality homes for homebuyers in this catchment area.”