Biggest U.K. Home Builder Says Housing Market Is Resilient

Persimmon Plc, the U.K.’s biggest housebuilder, said the long-term outlook for the country’s housing market remained resilient despite the economic gloom and latest national lockdown.

The firm delivered its upbeat assessment as it reported full-year revenue of 3.33 billion pounds ($4.6 billion) in a trading update Wednesday. While that was slightly down on a year earlier, it beat analyst estimates in a Bloomberg survey.

“Despite the impact of the unprecedented events of 2020, the levels of customer interest Persimmon has experienced, particularly through the second half of the year, demonstrate the resilient demand for new homes,” the company said in the statement.

House prices boomed during 2020, reaching a record high in December as a tax cut spurred Brits to upgrade their living situations after months of working from home. While the rally saw its average selling price rise last year, the company noted some headwinds looming on the horizon, including the end of a tax perk in April and the economic impact of lockdowns.

Persimmon said its weekly sales rate slowed toward the end of 2020 to more normalized levels, as pent up demand from the summer months relented. Shares fell as much as 5.3% in London trading on Wednesday morning.

The firm also warned that the pandemic could still hit short-term output as cases spread across the country. Social distancing measures could slow the pace on building sites just as demand strains supply.

“We start the year in the midst of a pandemic which is getting worse, and this of course could affect our production capability,” Chief Executive Officer Dean Finch said on a call with analysts.

Read More: Resilience Affords Persimmon Solid Results Amid Pandemic

Still, the housebuilder remains optimistic about the outlook. The housing market is one of the only areas of the economy to remain open in the national lockdown that was enforced last week, with estate agents still operating despite surging virus infections.

“On entering the third phase of tighter Covid-19 restrictions, whilst recognizing the commencement of the nation-wide vaccine roll out, the uncertainties surrounding the potential impact of the pandemic remain, particularly with regard to unemployment levels and consumer confidence,” the company said in the statement. “However, we believe that the longer term fundamentals of the U.K. housing market remain resilient.”

©2021 Bloomberg L.P.

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