Housebuilder says firm will be hit with 5% build rise this year
Persimmon said it expects build costs to rise 5% this year, adding that it was being 鈥渇rustrated鈥� by continuing planning delays in a trading update this morning.
The 拢3.3bn turnover housebuilder, issuing an update for the period from July to yesterday, said private reservation rates were 16% above the level seen prior to the pandemic in 2019, a figure which nonetheless puts reservations well down on the same period in 2020.
While Persimmon鈥檚 trading update didn鈥檛 provide a direct comparison to the 2020 reservation rate, the equivalent update in 2020 said trading was 38% above 2019 levels.
However, the 13,575 homes a year builder said demand for homes remained healthy, with the market having taken the changes to the government鈥檚 Help to Buy scheme 鈥渋n its stride鈥� and that it still expected to sell around 10% more homes this calendar year than in 2020.
Persimmon鈥檚 statement said trading was now 鈥渇ollowing a more normal seasonal pattern than the heavily pandemic disrupted year of 2020鈥�.
It said it was managing build cost inflation through utilising its various offsite facilities, including the Space4 timber frame business. It said it expected margins to remain 鈥渞esilient鈥� which would 鈥渁ccommodate[e] the expected increase in our build cost inflation this year of c5%鈥�.
The firm said it was continuing to bring forward new land into the business 鈥渄espite the well-documented planning delays suffered by the industry鈥�, which it described as 鈥渇rustrating鈥�.
The UK鈥檚 number three housebuilder by volume added it was on course to top pre-pandemic build levels next year.
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