Persimmon builds over 10,000 new homes despite economic challenges

In the UK, the housebuilding sector has shown signs of resilience amid economic challenges. Persimmon, one of the nation's leading housebuilders, reported the completion of 10,664 new homes in 2024, reflecting a 7% increase compared to the previous year. This accomplishment was attributed to strong private home completions, which rose by 18%, even as new partnerships for housing saw a 30% drop. The overall performance has provided a boost to the government's ambitions for housebuilding, as it seeks to address the ongoing housing supply issues. The Bank of England's monetary policy, which involved fewer base rate cuts, has played a significant role in influencing housing market dynamics. Although interest rates were reduced only twice last year to 4.75%, this limited approach helped to stabilize residential property prices and encouraged transactions. Persimmon's current forward order book has reached £1.15 billion, indicating an 8% annual increase, demonstrating continued demand for new homes in the face of economic pressures. The company has acknowledged headwinds such as inflation and the introduction of a building safety levy, which may impact potential margins going forward. Dean Finch, the chief executive, expressed confidence in the company's strategic investments in land and planning, as well as its internal capabilities. He believes this positions Persimmon favorably for future growth, particularly in light of governmental reforms aimed at enhancing the availability of high-quality, affordable housing. In contrast, other builders like Crest Nicholson reported mixed results, with their adjusted pre-tax profits projected at the low end of expectations. Crest is facing challenges related to fire safety upgrades in tall buildings, which have delayed their financial disclosures. Nevertheless, the broader housebuilding landscape appears to demonstrate optimism, with companies looking to adapt and thrive despite the ongoing challenges in the market.