Persimmon has become the latest housebuilder to reveal the benefits of the government's Help to Buy shared equity scheme.
The FTSE 100 company said it legally completed 5,022 new homes in the first half of the current year, up 7% on the same time in 2012. Its average selling price rose 5% to £179,200. It said:
The governments Help to Buy scheme, introduced in April 2012, has generated a positive response from prospective house buyers, bringing additional momentum to the traditionally stronger spring sales season. Whilst our weekly private sale reservation rate for the first half of the year was 12% ahead of last year, our reservation rate as measured from the date of the introduction of the Help to Buy scheme was 30% stronger.
We anticipate that all the major lenders will be providing Help to Buy related mortgage products over the coming weeks. This will present a wider choice to customers and will help support further increases in new home sales.
It predicted its underlying operating margins would rise to 15% in the first half, up from 12.1% the same time last year. Previously it had expected margins to reach 15%-17% by the end of 2014.
But the company's shares have dropped 2.2% or 28p to £12.12 as it said:
We have now entered the slower summer weeks for the UK housing market and continue to experience stable conditions. In the context of the wider economic challenges consumer confidence remains fragile. However we remain focussed on the delivery of the planned further growth of Persimmon and the successful execution of our long term strategy.
Analyst Anthony Codling at Jefferies issued a hold note, saying:
The update.. to our mind, sounded a note of caution; we felt the message was 'don't extrapolate current trends'. The group is moving into the quieter summer months, the spring selling season is usually bigger than the autumn one and it is difficult to ascertain how much of the first half demand was 'pent up' or sustainable. The expectations being laid were for steady rather than stellar growth.
We remain positive on the sector but expectations need to be kept in check.
This perceived caution has also hit rival builders, with Barratt Developments down 6.6p at 320.5p and Taylor Wimpey 1.9p lower at 98.3p.
