Persimmon warns on return of building cost inflation as house sales pick up

Housebuilder Persimmon warned on the return of build cost inflation and the impact of the increase in employers NI announced in the Budget today in an otherwise “optimistic” update on trading.

The company told shareholders: “We are seeing some signs of build cost inflation beginning to emerge in price negotiations for 2025 and are working closely with our supply chain to manage our costs, which will also be impacted by new building regulations and the employer national insurance increases announced in the recent Budget.

“We are seeking to mitigate the impact of these cost increases through robust commercial controls and other management actions.”

In an trading statement covering the quarter to end July Persimmon said that it was on track to deliver around 10,500 in the full year. During the third quarter the company delivered 1,416 homes, down from 1,439,including a 3% increase in private homes to 1,267 (2023: 1,234) and 149 Partnership homes (2023: 205).

Forward sales increased 40% to £1.45 billion, “reflecting more stable market conditions in 2024.”

CEO Dean Finch said: "Positive momentum in the business continued over the summer months and we remain on track to deliver growth in completions to c.10,500 for the full year. Visitor numbers and enquiries remain strong and sales rates continue to be well ahead of the prior year.

“Our forward order book is up 17% on the prior year with the private average selling price robust. Wecontinue to position the business for success, maintaining our focus on quality and customer service, and converting our land holdings into active developments."