Persimmon has strengthened its housebuilding forecasts for the year, saying it has been “encouraged” by the new Labour government’s planning reforms.
The company, which is one of the UK’s largest housebuilders, said its outlook was already being bolstered by improving consumer confidence, having seen an uptick in visits by potential buyers.
That trend is expected to continue after the Bank of England’s rate cut last week, which brought the base rate down from to 5% from 5.25% and will help reduce mortgage costs for prospective homeowners.
Persimmon suggested its housebuilding rates would also benefit from planning reforms announced by Labour shortly after the party’s general election victory last month, in which ministers pledged to reintroduce mandatory housing targets, and take swift action to clear bureaucratic backlogs to boost housebuilding across the UK.
“We are encouraged by the early announcements of the new government, particularly around planning,” the company said as it released half-year earnings on Thursday.
“Although we recognise that the government’s welcome planning reforms will take some time to come through, our ambition remains to grow our outlet base to over 300 in the medium term,” the company said, referring to large sites or fields for developments.
The housebuilder said it had “good confidence” it could deliver about 10,500 homes this year, which was at the top end of its previous guidance.
It completed 4,445 new homes in the first half of the year, representing a 5% rise on the same period last year. It included a 14% increase in private home completions to 3,742 homes.
New data released by Halifax on Wednesday also showed that UK house prices increased by 0.8% in July compared with the previous month, and rose by 2.3% year on year – the best rate since January.