Housing demand builds after vote to leave

A rise in revenues and average selling prices has been reported in recent research, which has been attributed to increased demand since the EU referendum result.

The Housebuilder Persimmon has documented a rise in 2016 revenues to £3.4billion, a rise of 8%, with volumes of legal completion growing by 599 new homes to 15,171. The average selling price for the Group increased to £206,700, a growth of 4%.

Along with customer demand, the firm stated that sales reservations during the autumn season also remained strong.

It also commented on the favourable aspects of new-build home purchase, including the wide range of mortgages available and resulting improved affordability.

Over the year, 255 new development sites were opened by the Group across the UK, with building taking place on all sites with implementable planning consent.

Persimmon states that it will continue to seek out opportunities for further land acquisition, whilst still considering the associated risks of referendum induced uncertainty.

Highlighting the rise in housing demand since the EU vote was Ian Forrest. The Investment research analyst at the Share Centre stated: “In a fourth quarter trading update today housebuilder Persimmon reported an 8% rise in full year revenues to £3.14bn and said average selling prices rose by 4% to £206,700. Interested investors should appreciate that demand for houses has actually increased since the EU referendum last June with the forward sales book up 12% on this point last year to £1.23bn. The group’s confidence was underlined by news that it has acquired a further 18,700 plots and opened 255 new development sites during the year.

“While there has been a limited affect from Brexit so far the longer term risk to the UK economy created by the UK’s decision to exit the European Union remains so we continue to regard the shares as higher risk.”

 

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