First-time buyers' focus standing Persimmon group in good stead

The York-based firm said that while the result of the EU referendum has created increased economic uncertainty, customer interest since then has been robust with visitor numbers to its sites up by 20 per cent.

Chief executive Jeff Fairburn said: “Our private sale reservation rate since July 1 is currently 17 per cent ahead of the same period last year. The group is now trading through the traditionally slower summer weeks but customer demand remains encouraging and we anticipate a good autumn sales season.

“Our sales advisers are saying customers are not seeing any real impact on them. If they can afford the deposit they won’t be put off at the thought of Brexit. They want to get on with their lives.

“The housebuyer is not about to put their life on hold. The uncertainty is what will happen with jobs.”

Persimmon is in a good position to weather the economic uncertainty caused by Brexit as its focus is on the regions and its average selling price is still fairly modest compared with other housebuilders.

The group’s average selling price rose 6 per cent to £205,762, up from £194,378 in the first half of 2015.

“£205,000 is affordable,” said Mr Fairburn.

“That’s the vital thing. There is clearly demand at the lower end of the market.”

Persimmon said pre-tax profits rose 29 per cent to £352.3m in the six months to June 30, while revenue increased 12 per cent to £1.49bn.

The group said the Bank of England’s decision to cut interest rates from 0.5 per cent to 0.25 per cent is also boosting demand.

Mr Fairburn said: “Quite quickly it was established that lenders are keen to lend post Brexit. The reduction in the Bank of England’s rate is working it’s way through and that’s all positive news for the buyer.”

Persimmon and its listed rivals saw their shares surge after the Bank of England slashed interest rates and unveiled a package of measures worth up to £170bn.

With more rate cuts likely before the end of the year, housebuilders are seen as being among the biggest beneficiaries of the Bank’s economic recovery plan.

However, Persimmon added that it will “remain cautious” with respect to new land investment in the face of uncertainty created by the vote.

The group said that after a modest increase in the week following the referendum result, cancellations have returned to normal levels and are currently running slightly lower than the same period last year.

Analyst Clyde Lewis at Peel Hunt said: “Persimmon’s outlook statement is by far the most confident we have seen from the housebuilding sector since the referendum. The healthy level of activity in the quiet summer months has given the group the confidence to indicate that it expects a good autumn sales season, which in turn has encouraged them to increase their build activity for the second half.”

Analyst Robin Hardy at Shore Capital added: “Persimmon’s statement is bullish and confident and again seeks, in our view, to push the message that the Brexit result is set to have little or no impact on the new homes market.

“Clearly in the still relatively short period since the referendum, demand and pricing have been robust but we still think that it is too early to be too definitive about what lies ahead for the wider economy and for housing. However, for the remainder of this financial year... it appears likely that current forecasts will be exceeded.”