Economy's '˜resilience' gives housebuilders a boost

Two of Britain's biggest housebuilders have reported solid progress as the industry attempts to close the gap between supply and demand.

The resilient economy is helping builders Persimmon and Taylor Wimpey. Picture: Cate Gillon/Getty Images
The resilient economy is helping builders Persimmon and Taylor Wimpey. Picture: Cate Gillon/Getty Images

Persimmon thanked the “resilience of the UK economy” for helping drive an 11 per cent leap in forward home sales since the start of the year.

The owner of the Charles Church brand said total forward sales, including legal completions, had jumped to £2.6 billion in the year so far, up from £2.3bn a year earlier.

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Its weekly private sales rate is running 12 per cent higher since the end of February, bringing the total of homes sold so far in 2017 to 8,928 at an average selling price of around £229,500.

The figures came as rival Taylor Wimpey hailed a “good start” to 2017, with “positive customer demand” and steady mortgage availability supporting a strong sales performance.

In a trading update, it said the market had remained positive in the first four months of the year, with its total order book currently standing at 9,219 homes, up from 8,811 a year earlier. By value, the order book has risen 2 per cent, year-on-year, to just over £2.2 billion.

In its statement, Persimmon said: “[Our] operational performance continues to be excellent, with the group delivering higher volumes of newly built homes in local communities across all our regional markets, supported by the resilience of the UK economy.

“The prevailing disciplined approach to mortgage lending is enabling customers to buy newly built homes on attractive but sustainable terms.”

Meanwhile, Taylor Wimpey is to set aside £130 million as part of plans to help customers trapped in onerous leasehold contracts drawn up by the housebuilder.

Following a review of lease agreements struck over the past decade, the company also issued an apology for the “unintended financial consequence and concern” for what MPs dubbed the “PPI of the housebuilding industry”.

Leaseholders were forced to stomach ground rents that doubled every ten years and the freeholds to their houses were able to be sold to third-party private firms, making many homes unsaleable.

It said: “We acknowledge that the introduction of these doubling clauses was not consistent with our high standards of customer service.”