A housebuilding giant has hailed a hike in sales, orders and property prices as "green shoots" signal the potential easing of pressures in the sector.
Persimmon reported a 6% rise in private sales per outlet over the first quarter, while it said average sale prices in the private market lifted 6% to around £283,000 since the start of the year.
The firm added that its forward order book was up 18% year-on-year in the first quarter, keeping it on track to complete between 10,000 to 10,500 homes over the full year.
However, it is still having to offer incentives on prices, at around 4% to 5% to boost demand.
READ MORE: Housebuilder Taylor Wimpey hails good start to spring season
The housing market has been dealt a blow by interest rates being hiked to the highest levels since 2008 and wider economic uncertainty.
Mortgage rates have eased back and a number of players in the sector are reporting improved trading.
Taylor Wimpey said earlier this week that the housing market was stabilising, though it still reported a dip in its sales rate.
Dean Finch, group chief executive at Persimmon, said the firm had seen a "good start to the year".
READ MORE: Group hails 'landmark' housing project
He said: "We saw an improvement in sales rates alongside firm pricing.
"Trading over recent weeks has been encouraging with robust visitor numbers and enquiries, giving us confidence for the remainder of the year."
Persimmon, which has sites across Scotland, cautioned that the build cost inflation and lower selling prices seen at the start of 2024 will impact first half figures, with the current pick up in demand being reflected in second half trading.
Oli Creasey, property analyst at Quilter Cheviot, said, like the earlier update from the other housebuilder, there are signs of "green shoots" after a difficult period.
READ MORE: 'Landmark' building acquired for conversion to affordable housing
"Much like Taylor Wimpey’s trading statement earlier this week, today’s announcement from Persimmon provides few surprises and few changes from 2023," Mr Creasey said. "Sales volumes are down slightly year-on-year (-10%), but more relevantly the number of sales per outlet is up (+6%), perhaps an early green shoot showing the beginning of a recovery in the housebuilding market."
He added: "While the sales rate is moving in the right direction it is still around a third lower than the rates achieved in Q1 2022 when interest rates were significantly lower.
"The other green shoot visible is a 6% increase in the average sale price within the forward order book, which has increased significantly since the end of the year. This is an encouraging improvement, although it will be some time later this year when these sales are converted.
"Management has reiterated its guidance of around 10,000-10,500 completed homes this year, a marginal increase on 2023, but some way below 2022. Commentary suggests that volumes and sale prices are expected to accelerate in the second half of the year, again similar to the message from Taylor Wimpey’s executive team.
"Perhaps most interesting is the data not being provided. At Q1 last year, Persimmon reported a cash balance of £350m, while the equivalent figure has not been reported this morning."
Shares in Persimmon closed down 0.74%, or 9.5p, at 1,282.5p.
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