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Persimmon eyes 10,000 homes in 2010

Persimmon is looking to acquire land that has already secured planning consent as it aims to build 10,000 new homes in 2010.

The housebuilder built 8,976 homes in 2009, with almost 5,000 of these coming in the second half of the year.

Persimmon chief executive Mike Farley said the aim was to at least maintain the level of the last six months throughout 2010. The firm is looking to snap up shovel-ready land in a bid to boost this build programme.

Mr Farley said: “Our strategy is to acquire land which already has planning consent, particularly in the south of England.

“We are aiming to at least maintain the rate of the second half of the year, but it does depend on the market.”

Persimmon is the only major housebuilder not to have pursued a rights issue. It has reduced its debt from £1.2 billion in April 2008 to £270 million now, without launching a rights issue.

Turnover for the year to 31 December 2009 is expected to be around £1.4bn, while forward sales for 2010 total £640m - 40 per cent ahead of their value this time last year.

The housebuilder is also expected to write up the value of its land portfolio when it reveals its full-year results in March.

Persimmon had previously written down the value of its land, assuming a 10 per cent drop in house prices in 2009

Mr Farley said: “As a company we are sitting in a good position to react to the market and whatever it brings.

“We have got our debt down to a good level and have a very strong balance sheet. We took some very prudent writing down on our land and have a very strong order book as well.”

He added: “We are sure of a good start to the year.” A total of 14 per cent has been shaved off the build costs of a
Persimmon home since the collapse of the housing market, 10 per cent of which has come from reduced wages for subcontracted workers.

A further 2 per cent has come from a reduction in material costs, and 2 per cent from efficiency savings.

Persimmon is starting to increase the numbers of workers on its sites as it expands its build programme.

Mr Farley added: “Having the confidence in our sales allows us to upscale our site activity. It is nice to be able to talk about positive news.

“In recent months we have increased the number of guys working on site. We started about 40 sites in the first half of last year, 50 in the second and have another 90 to come.

“It is good news for the future and the construction industry as a whole.”