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House prices remain firm at Persimmon despite lockdown

The company’s order book has taken a hit.

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The housebuilder is starting to reopen its construction sites (Andrew Milligan/PA)

The housebuilder is starting to reopen its construction sites (Andrew Milligan/PA)

The housebuilder is starting to reopen its construction sites (Andrew Milligan/PA)

Housebuilder Persimmon has not seen a big drop in house prices during lockdown, but its forward sales have taken a hit, the company revealed on Wednesday.

Persimmon said the average selling price for a new home in its order book was around £244,500, up from £237,850 in 2019.

The company’s forward sales position was “robust” at £2.4 billion, Persimmon said, however it is down from £2.7 billion the year before.

“Persimmon, like others in the sector, has said prices of new homes have remained “firm” through the lockdown. However, the forward order book is down significantly compared with the same period last year,” said William Ryder, equity analyst at Hargreaves Lansdown.

“The big question is, which side of the equation moves in the next few months. Persimmon will be hoping that sales volumes rebound, but if we enter a recession demand could take some time to recover. In this case, volumes may fail to recover or house prices may fall – either option is unpleasant.”

The Government has been clear that it wants the UK's housebuilders to get back to building and this week we have started the phased process of getting back to work safely on siteDave Jenkinson, Persimmon

Workers at the company’s building sites across the UK last month downed tools in a bid to slow the spread of coronavirus but a phased reopening is now under way.

“The Government has been clear that it wants the UK’s housebuilders to get back to building and this week we have started the phased process of getting back to work safely on site in order to deliver the new homes the country needs,” said chief executive Dave Jenkinson.

He added: “Persimmon is responding to the crisis from a position of strength, to the benefit of all its stakeholders; our long-term strategy and business model recognises the cyclical nature of the housing market, minimises financial risk through the cycle, and provides the flexibility needed to manage effectively through this difficult period.”

PA Media