Housebuilder says it still expects to hit its target of building 14,500 to 15,000 homes this year despite 10% drop in development

Persimmon has reported a 10% drop in completions for the first half of the year as ‘planning complexity’ slowed the opening of new sites.

The housebuilding giant, in a trading update for the six months to 30 June, reported 6,652 completions, down on the 7,406 recorded in the same period last year and fewer than the 7,584 posted in 2019 pre-pandemic.

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Persimmon also reported an 8% fall in turnover to £1.69bn and an 8.4% drop in pre-tax profit to £439.7m, but said completions would pick up in the second half of the year.

The firm opened 60 new outlets – sites where homes are ready to sell – in the first half of the year, missing its original target of 75.

It said: “Delays and increasing complexity in the planning system are impacting our ability to open new outlets as promptly as we would like.”

It also criticised the government’s support package announced last month aimed at alleviating the nutrient pollution regulation crisis that is holding up an estimated 100,000 homes nationwide.

It said: “The government’s recent statement on the issue does not appear to offer the short-term clarity the industry hoped for, so we continue to see around 1,500 of our plots affected, a number that is likely to grow until a resolution is found.”

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Persimmon however said it is confident of opening around 70 outlets in the next six months, hitting a target of growing sites by 10%. It said it is rebuilding its outlet position after a land-buying pause three years ago.

It said: “We re-iterate our year end volume expectations of delivering 14,500 to 15,000 units with forecast full year profit in line with our expectations.” Last year the housebuilder completed 14,551 homes.

Persimmon said it has experienced cost inflation of around 8% to 10% in the first half of the year but said this has been ‘largely offset’ by increased selling prices. It said its average selling price for private homes increased 3.5% to £267,325. 

Dean Finch, group chief executive of Persimmon, said: “We are stepping up proactive engagement with local authorities, enhancing our approach to developing attractive communities and raising the bar on design to help mitigate planning challenges.

“We continue to expect our volume delivery to be significantly higher in the second half of the year.”

A Fair Deal for Housing 

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Housing Today believes the government should not back away from its manifesto pledge of building 300,000 new homes a year by the middle of the decade. We badly need more homes, and a lack of supply is a major factor in creating problems of affordability for both buyers and renters.

Over the next few months, Housing Today  will be exploring potential solutions to help us ramp up housebuilding to 300,000. These are likely to include different ways of working, funding asks of government and policy ideas that could boost housebuilding.

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