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UK Homebuilder Persimmon Sees Sales Improve Since October – BNN Bloomberg

(Bloomberg) — Persimmon Plc says it sees reason for optimism in Britain’s housing market after an uplift in autumn sales. 

The homebuilder said the average number of homes sold at its sites per week rose to 0.59 over the past five weeks, compared with 0.45 in 2022, according to a statement Tuesday. Persimmon also said it expected to sell at least 9,500 in 2023, up from previous guidance of at least 9,000 for the year.

“While the near term is likely to remain challenging and we remain disciplined on costs, we continue to position the business for growth when the market recovers,” Chief Executive Officer Dean Finch said in the statement.

Persimmon has endured a tough year as high interest rates and a cost-of-living squeeze sapped demand from first time-buyers, a group which account for roughly a third of the developer’s customers. The company slashed hundreds of jobs this year in an attempt to rein in costs, and announced that it was planning to remove certain specifications in homes that it deemed less important to customers. 

Persimmon said the average selling price in its private forward sales dropped to about £277,750 ($342,060) down from an average £282,316 at the end of June. The company’s incentives rate on new home reservations is running at 3.6% of the house price, as developers attempt to lure cash-strapped buyers with freebies, particularly in the south of England where house prices are falling faster than in most other parts of the UK.

Read more: Buy a Home, Get a Tesla: UK Builders Tempt Buyers With Freebies

While some are betting the Bank of England may now be at the tail end of its hiking cycle — which has seen officials deliver the sharpest series of rate rises in three decades — mortgage rates still linger at levels close to 6%.

©2023 Bloomberg L.P.

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