HOUSE builder Persimmon plans to nearly double the number of new home completions it makes in Scotland this year than last as the firm says the first-time buyers’ market appears to be unfazed by interest rate instability and Brexit.
Jeff Fairburn, Persimmon chief executive, said the company is aiming to complete 2,000 new homes in Scotland in 2018, as it posted a 13 per cent increase in profit before tax to £516.3 million in half year results to June 30.
Persimmon, which has its headquarters in York, delivered around 1,250 new homes to customers north of the border last year and so far has 16% more completions over the first six months of this year than last year’s 776 at the same time.
Mr Fairburn said: “Scotland is an important part of the business for us.
“In the first half of the year volume has been good, we’ve had nearly 900 completions and we would expect to do around 2,000 for the full year.
“Average selling price is a little bit lower than the same time last year. That is a function of us aiming at the faster moving part of the market where people want to get on to the housing ladder."
Mr Fairburn, above, said: "So the average [Scottish] price is around £180,000. Obviously that fluctuates quite significantly between the different locations we have but in overall terms it is quite encouraging and enables people to get onto the housing ladder.
“We are pleased with the completions in the first half and we are well-positioned with sites and interest on those sites moving into the second half of the year.”
Persimmon said housing sales volumes overall increased by 3.6% to 8,072 completions, against 7,794 last year at an average UK selling price of £215,813.
Mr Fairburn said: “Brexit obviously is something that is in the forefront of our mind but in actual fact from our customers' perspective, certainly in our market place, in the lower end of the market, I think people are confident about their jobs and they can access good mortgage opportunities, they’re keen to get onto the housing ladder and we’re keen to support in that approach.”
Mr Fairburn earlier became the focus of attention when it was published he would receive £75m in total from an incentive scheme, with £47.1m awarded last year and the second tranche due to mature this week.
That amounts to £28m and is less than the first award as Mr Fairburn agreed to give up 50% of the second tranche.
Laith Khalaf, senior analyst at Hargreaves Lansdown, said: "Things are still heading in the right direction at Persimmon, but the pace of progress is slowing from the breakneck speed attained last year.
"This is a pretty healthy set of results by anyone’s standards, but clearly presents a backward look at performance."
The future is not looking quite as rosy as the recent past however, with house price growth moderating and sales not as buoyant as they were."
He said: "However there is a growing sense we are getting to the tail end of the housebuilding boom, and that has been reflected in some pretty nasty share price declines this summer.
"Persimmon shares currently stand around 15% lower than at the beginning of June, and that presents a bit of quandary for investors."
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