Achi news desk-
The company added that its order book increased by 18% year on year in the first quarter, keeping it on track to complete between 10,000 and 10,500 homes over the full year.
However, it still has to offer price incentives of around 4% to 5% to boost demand.
READ MORE: Housebuilder Taylor Wimpey welcomes a good start to the spring season
The housing market has been hit by interest rates rising to the highest levels since 2008 and wider economic uncertainty.
Mortgage rates have reduced and a number of players in the sector are reporting improved trading.
Taylor Wimpey said earlier this week that the housing market was stabilizing, although it still noted a decline in its sales rate.
Dean Finch, Persimmon group chief executive, said the company had seen “a good start to the year”.
READ MORE: Group praises ‘landmark’ housing project
He said: “We saw an improvement in sales rates alongside firm prices.
“Trading over the last few weeks has been encouraging with solid visitor numbers and enquiries, giving us confidence for the rest of the year.”
Persimmon, which has sites across Scotland, warned that first-half figures will be affected by construction cost inflation and lower selling prices seen at the start of 2024, with the current increase in demand 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 affordable housing conversion
“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. “The number of sales has decreased slightly year on year (-10%), but more relevantly the number of sales per store has increased (+6%), perhaps an early green event showing the start of a recovery in the house building 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 that can be seen is a 6% increase in the average selling price within the pre-order book, which has increased significantly since the end of the year. This is an encouraging improvement, although it will some time later this year when these sales are converted.
“Management have reiterated their guidance of around 10,000-10,500 homes completed this year, a marginal increase compared to 2023, but well below 2022. The commentary suggests that sales numbers and prices are expected to accelerate in the second half of the year, again similar to the message from Taylor Wimpey’s executive team.
“Perhaps the most interesting is the data that is not provided. In Q1 last year, Persimmon reported a cash balance of £350m, while the corresponding figure has not been reported this morning.”
Shares in Persimmon closed up 0.74%, or 9.5p, at 1,282.5p.
