Housebuilder Persimmon saw the number of houses it completed fall by more than a third and lost 拢500m in revenues in the latest sign of a major slump in the property market.
The York-based firm has released results for the first six months of the year which show that its new home completions fell from 6,652 in the same period last year to 4,249. Over that period, total group revenue was 拢1.19bn - down from 拢1.69bn in the comparable period - and underlying operating profit fell from 拢440.7m to 拢152.2m.
Group chief executive Dean Finch said the company鈥檚 performance had been 鈥渞obust鈥 given the issues caused by higher mortgage rates, the ending of the Government鈥檚 Help to Buy scheme and 鈥渟ignificant market uncertainty.鈥
Read more: Bellway to build fewer homes as reservation rates drop 28% amid mortgage hikes
He said Persimmon was on track to deliver its profit expectations, though its current forward sales position for the five weeks post period end was 30% down year-on-year. Persimmon also highlighted 鈥渟tubborn build cost inflation in the period鈥 but said the current rate of around 5% was expected to moderate in the months ahead.
The slump in sales has also been seen by other major housebuilders, with Bellway and Taylor Wimpey both highlighting issues in the housing market in the last week. Mr Finch said: 鈥淎gainst a backdrop of higher mortgage rates, the removal of Help to Buy and significant market uncertainty, Persimmon has delivered a robust sales rate excluding bulk sales whilst growing the private average selling price in our forward order book and also securing cost savings. We are on track to deliver profit expectations for the year and are building a platform for future growth.
鈥淥ur private sales rate has remained broadly consistent throughout the period resulting in a private forward order book that is now 83% higher than it was at the beginning of the year, despite controlled use of sales incentives and limited recourse to investor deals. Our pricing overall has remained resilient with continued positive momentum in the forward order book.
鈥淗owever, the reduced volumes in the first half of the year has negatively affected our operating margins as we predicted earlier in the year. As we look forward, we expect increasing completions to result in improving operating margins.鈥
Persimmon鈥檚 average new home selling price rose by more than 拢10,000 during the period to 拢256,445. The number of plots owned or under control fell slightly to 84,751
