Positive Persimmon trading report, brick shortages worsen, and house prices increase

Persimmon report strong sales amid worsening material supplies

After Bellway’s positive trading announcement last week, it was Persimmon’s turn to deliver similar news, reporting a 64% increase in pre-tax profit in the six months to the end of June 2021.

In addition, the volume housebuilder declared that new home sale completion levels were close to those seen in the first half of 2019 (7,406 completions vs 7,584 in HY 2019).

Not only were Persimmon reporting strong sales, but the developer also boasted of strong resilience in the face of ongoing material shortages through investment in their own tile and brick factory. They have expanded their off-site manufacturing hub in Harworth, which runs alongside their existing timber frame and roof cassette factory in Birmingham.

This news came in the context of worsening brick shortages, as order cancellations fell sharply, leading to reduced supplies. Brick producer Wienerberger have blamed this drop in cancellation rate (from 24% to 6%) for ongoing delivery failures, and warned of extended lead-in times.

House price growth driven by Northern regions

The ONS revealed this week that the price of the average UK property had risen by 13.2% in the year, reaching £265,668. House prices rose fastest in the North West of England (+18.6%), Wales (+16.7%), Yorkshire and the Humber (+15.8%) and the North East of England (+15.3%).

In contrast, London saw the lowest price rises, reaching just +6.3% when compared to June 2020. Land Registry data showed that demand was greatest for semi-detached and terraced homes.

Finally, the ONS declared that the average house price rose by £31,000 in the year; more than the average household income at the end of 2020. Is it any wonder that getting on the property ladder is so difficult?

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