Persimmon offers cheer on profits as house prices stabilise
Share:
Housebuilder Persimmon has said annual profits will be at the top end of forecasts, but said buyer confidence was vulnerable to uncertainty over interest rate cuts. The Charles Church group saw shares lift 5% in Tuesday morning trading after it said private market house prices had improved over the year, edging up to around £287,150 from £285,774 a year earlier, with completions also up 7% at 10,664.
It said full-year underlying pre-tax profits are set to come in around the upper end of the £349 million to £390 million range expected in the market. We are mindful of evolving macroeconomic and geopolitical uncertainties. Chief executive Dean Finch cheered improved market conditions, saying “customer enquiries and sales rates have been consistently ahead of the prior year since the spring selling season”.
But the FTSE 100 firm flagged worries over the outlook for interest rates and the impact on the market. “We are mindful of evolving macroeconomic and geopolitical uncertainties, including the timing of future interest rate changes, and the effect that they may have on our market and consumer confidence in the short term,” it said.
Economists are pencilling in further interest rate cuts but the timing and pace of reductions is uncertain given that UK inflation is back on the rise and with incoming US President Donald Trump set to impose trade tariffs. Recent turmoil in UK government bond markets, caused by worries over UK public sector debt levels and stalling growth, is also seen as adding to pressure on mortgage rates.
