UK's Persimmon expects to build at the top end of its previous housebuilding target range in 2024 as easing mortgage rates and a UK rate cut spur recovery hopes in the sector, it said after posting a 3% drop in interim pre-tax profit.
British homebuilders are optimistic of a near-term turnaround in fortunes as easing mortgage rates and the first UK rate cut in more than four years are expected to spur home sales in a sector where demand has remained subdued for more than a year.
Many of the top UK mortgage lenders lowered rates in February and July in anticipation of the long-awaited rate cut decision, although the delay in the monetary policy loosening averted continual reduction in home loan rates through the year.
"Consumer confidence continues to improve leading to a strong pick-up in enquiries and visitors, which will be further supported by the recent cut to the Bank of England base rate," the FTSE 100 company said in a statement today.
The positive tone of the housebuilder chimes with policy set out by Britain's new Labour government, which wants to tackle Britain's housing crisis by easing planning restrictions and boosting land supply.
Persimmon, which builds homes ranging from studio apartments to five-bedroom houses, said the weekly net private sales rate per outlet since the start of the second-half stood at 0.69, up 68% on last year.
The company said it has got detailed planning on about 6,000 plots so far in the year, with around 1,000 of these achieved in July following the new government taking office.
Persimmon said it was on track to build about 10,500 homes for the full year, even as its pre-tax profit dropped 3% to £146.3m for the six-month period ended June 30.
