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Persimmon cheers investors with sales and dividend rise

The housebuilder, whose brands include Charles Church and Westbury, said sales had climbed 4% over the last eight weeks while its order book is 10% ahead of last year at £1bn

Britain’s second-largest housebuilder Persimmon has seen a bounceback in summer sales, driven by the north, after a dip in the first half of the year.

Shares in the company climbed nearly 3% to 394p, as it cheered investors by upping its dividend to 4p from 3p.

“The sales momentum in the northern business has been maintained – normally we see a slowdown in the summer months,” said Mike Farley, the chief executive, adding that unemployment was falling in the north west and Scotland. “We have seen some slowdown in the south and central [England].”

“We need to see what happens in the autumn period when a pick-up usually takes place,” he added. “We’re not getting carried away, but the market is stable which is down to mortgage availability. Mortgage rates are very low, and low interest rates will be here for a while. We don’t see problems with affordability, it’s that lack of deposit.”

The housebuilder, whose brands include Charles Church and Westbury, said sales had climbed 4% over the last eight weeks while its order book is 10% ahead of last year at £1bn. This comes after a 5% dip in the first six months of the year, when Persimmon completed 4,439 homes, compared with 4,657 a year ago. It made an underlying profit before tax of £59.7m in the first half, up 52%.

Shrugging off the gloomy economic news and financial market turmoil over the past few weeks, Farley said: “People need to buy, they want to buy. They’d rather buy their own home than rent – it’s cheaper to buy than to rent.” He said first-time buyers usually make up 15% of Persimmon’s visitors, but that number has risen to 23% due to the government’s First Buy scheme. Persimmon secured a fifth of available funding to help more than 2,000 first-time buyers get a foot on the housing ladder.

The average price of a home sold by Persimmon in the first half fell nearly 4% to £162,647 because the builder sold more affordable homes, with an average price of £100,000, and more smaller houses with two bedrooms. This will reverse in the second half, as it has already taken more orders for larger homes with three or four bedrooms, with an average price of £205,000.

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