Major housebuilder Persimmon says it is aiming to grow the number of new homes it builds but says affordability is still a problem for its customers.
The York-based developer - which is among the country's five largest - is targeting the completion of about 12,000 properties next year, up from an estimated 11,000-11,500 this year and 10,664 the year before that. In half-year results, bosses said affordability issues had been eased by the relaxation of some lending rules and real term pay rises, but that was set against increases in bills and the feeling of bigger economic uncertainty weighing on customers.
And despite interest and mortgage rates coming down, Persimmon said many potential customers are still priced out of the market. It comes as the group's average selling price rose 8% to about £284,000, up from £263,288.
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Investors were told the group had seen a 4% rise in completions over the six months to the end of June to 4,605, with new housing revenue up 12% to £1.31bn and underlying operating profit up 13% to £172m. Persimmon is on track to deliver between 11,000-11,500 new homes this year as it boosted its number of sales outlets by 4% to 277.
Dean Finch, group chief executive, said: "I am pleased that we have continued to grow in the first half of the year despite challenging market conditions and with affordability still an important constraint. Our average sales price, sales, completions, planning approvals, active sites and forward order book are all up, many against industry trends, showing that our strategy including a focus on self-help has continued to deliver.
"An improvement in operating profit and return on capital demonstrate the benefit of our on-going operational discipline. We continue to invest in our key capabilities to further strengthen this growing platform.
"Disciplined investment in land is being complemented by planning success to secure additional site openings. Our vertical integration strengths have been further enhanced, with more efficiency benefits to come. Our three-brand strategy is helping to increase sales, with investment in marketing seeking to drive further growth."
Persimmon warned that "cost inflation, on-going affordability constraints and increased industry-wide costs" would impact its ability to grow margins but hoped a stable housing market would give it opportunity to grow its number of sites and volume.
Earlier this week, fellow housebuilding giant Bellway said first-time buyers needed support as it unveiled results that showed it had more homes over the past year with 8,749 sales completed compared with 7,654 the prior year. The Newcastle firm is expecting this total to surpass 9,200 homes in the year ahead.