• Text size      
  • Send this article to a friend
  • Print this article

Housebuilder's profits surge

Housebuilder Persimmon saw profits surge by nearly 50% last year and said 2014 had got off to a strong start as the Government's Help to Buy scheme continues to send buyers flocking to developments.

The Charles Church and Westbury Partnerships builder said the property market revival sent underlying pre-tax profits up by a better-than-expected 49% to £330 million in 2013, spurred on by initiatives to boost mortgage lending and Britain's burgeoning recovery.

It now aims to speed up payments to shareholders under a planned £1.9 billion programme to return cash to investors following the bumper year.

Persimmon's profits hike comes after revenues rose by more than a fifth - 21% - to £2.1 billion and legal completions rose 16% to 11,528 in 2013.

Average selling prices rose 4% to £181,861, driven by an increase in the number of large family homes sold by the group.

Its private home sales rate was 39% higher over the second half of the year after the first phase of Help to Buy launched last April 1, offering equity loans on new builds to help buyers secure properties with a 5% deposit.

Persimmon has ramped up construction efforts to meet the demand, opening 90 new sites in the first half of 2013 and starting work on another 40 of 90 planned for the first six months of 2014.

The York-based group said the Help to Buy boost had continued into 2014, with more than a third of sales reservations made with mortgages linked to the equity loan scheme.

It said the early spring selling season had been "encouraging" so far as weekly private home sales rates rose 22% year-on-year in the first eight weeks.

The group's forward order book is 41% higher at £1.4 billion for 2014, although it signalled a slight easing in wider property market conditions as it said it expected a "more modest" year of progress.

Its results came as bank lending figures showed the number of mortgage approvals granted to home buyers continued to run at a six-year high in January.

The British Bankers' Association (BBA) said 49,972 approvals for house purchase worth £8 billion got the go-ahead last month - up 6% on December and 57% higher than a year earlier.

Contextual targeting label: 
Finance

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis.
If you're a relatively new user then your comments will be reviewed before publication and if we know you well and trust you then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.

215385