PERSIMMON

Who buys a house in August? Lots of people, says builder, which yesterday boasted that scores of homebuyers had taken a break from the beach to visit its sites. Forward sales are up 9 per cent to £910 million in the first half and its average selling price is up 6 per cent to £174,000.

Persimmon is convinced that the storm has passed and is starting work on 40 new sites, with plans afoot for a further 50 sites in the second half. Persimmon has even begun to take on management trainees, a big sign of confidence in the future.

If one swallow does not make a summer, a good few weeks does not make a long-term recovery and Mike Farley, chief executive, admits that much depends on the banks’ willingness to lend and job prospects.

Mortgage approvals stand at just over half the long-term average of 93,000 a month and the majority of buyers must provide a deposit of 25 per cent. Persimmon is getting first-home buyers over the threshold with the help of Homebuy Direct, a government scheme, under which the builder and the Government together lend 30 per cent of the deposit. Persimmon’s shared equity position rose to £47.2 million in the six months to June, up from £19.8 million. That puts Persimmon out of pocket and government funding for these schemes is also under pressure. When funds run out, it will be back to square one for first-time buyers. Stay away.

Courtesy of The Daily Times