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Help to Buy boosts Persimmon home sales

Persimmon has reported an increase in forward sales with over 3,000 houses sold under the Help to Buy Scheme.

The house builder said the introduction of the government-sponsored Help to Buy equity loan scheme in April 2013 “has proved particularly attractive”, with over 3,000 homes sold under the scheme to date.

In its interim management statement for the four months from July to November, Persimmon said: “In response to the improvement in sales we have increased our build rates across the country. 

“Our robust build programmes and processes are enabling the group to react swiftly to the increase in sales activity.”

But Persimmon said the launch of government-guaranteed mortgages in October had yet to have an impact on the housing market.

“With only a limited number of lenders involved in this second phase so far the impact to date has been muted due to the higher level of interest rates being charged. 

“We anticipate sales supported by these guaranteed mortgages will increase as interest rates begin to reduce with more lenders entering the market over coming weeks and months,” the statement said.  

Persimmon added it expects mortgages under the equity loan scheme launched in April to “remain the preferred choice for the majority of customers in the housebuilding industry” because rates are more competitive than under the government guarantee.

The statement also said Persimmon is looking forward to the outcome of the government’s consultation on obtaining local planning consents for housebuilding.

“A simplification of the red tape relating to these requirements will undoubtedly enable the industry to deliver an increase in new homes more quickly,” it said.

The house builder said the improvement in sales activity reported in its half-year results in August had continued.

In August it reported a 39 per cent increase in its pre-tax profits to £132m in the first half of 2013 from £94.8m last year.

Visitor levels to sites between July and November were 20 per cent ahead of those in the same period in 2012, and cancellation rates were 16 per cent, compared with 20 per cent in the same period last year.

Persimmon said output of timber frames from its Space4 factory is expected to increase by 25 per cent in 2013, compared with 2012, to enable it to respond to demand.

It added that it was “encouraged by the support provided by our suppliers and sub-contractors to our increased build requirements and look forward to the further development of these long term relationships as they grow in partnership with Persimmon”.

Persimmon reported its weekly private sales rate was 45 per cent higher than July to November 2012, while recognising market conditions last year were affected by the Queen’s Jubilee and Olympic Games.

To date it has opened 65 of the 85 new sites identified for the second half of 2013. With 385 sites currently open, Persimmon said it expects its network to increase to 400 outlets by the end of the year.

Since July, Persimmon said it has acquired 6,000 new plots of land, around 1,300 of which were converted from its strategic land bank.

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