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Persimmon director reveals Scots housing market slower than UK

PERSIMMON has warned that the Scottish housing market is a "little tighter" than other parts in the UK.

Jeff Fairburn, group managing director and chief executive of Persimmon's north division, said that the company is increasingly using part-exchange to entice buyers in Scotland and is also dipping in to its own reserves to offer shared equity.

He said: "Overall performance [in Scotland] is fairly in line with the rest of the country but we are having to work a bit harder at it.

"The market is a little tighter in Scotland and trading is a little bit more difficult.

"Part-exchange is something we are using quite widely in Scotland, more so than in England, and that is working quite well.

"We are using some shared equity of our own to support the market but that is quite costly. We are having to do a little more in terms of those types of incentives to get people in to the market."

The Scottish Government's MI New Home scheme, which offers 95% mortgages, has been welcomed by the house building industry.

However Mr Fairburn said it has got off to a "slow start" and would like to see the addition of part-exchange and shared equity options similar to what is available in England. He said: "There is very good interest in it but we need to translate that to sales.

"To be fair, in England it got off to a relatively slow start there and improved. We now see decent volumes on it in England, 10% to 15% of our weekly sales, and we would hope to eventually see that in Scotland.

"Mortgage lending rates are a key issue and we have seen some small improvements, so that will help as well."

Average prices in Scotland were said to be holding steady, although across the UK Persimmon reported a 5% rise from £163,999 to £172,000 due to selling larger homes. Mr Fairburn said the company is concentrating on the mid-market in Scotland.

He said: "There are fewer buyers at the top end. We are concentrating our efforts in the middle market and two to four bedroom family homes."

In a management statement covering the period July 1 to November 12, Persimmon said weekly private sales are ahead by around 4% with visitor levels 6% up.

Cancellation rates continue to run at historically low levels of around 20%. It said it has hit sales targets for the current year and has £508 million of forward sales reserved.

Persimmon expects to end the year with more than £135m of net cash.

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