Persimmon Reports Decline in 2023 Sales Rate with Positive Outlook for Demand

By Joe Hoppe

UK-based house builder Persimmon has reported a decrease in its sales rate for 2023, although demand showed improvement in the final quarter and the company's forward sales position has increased.

According to Persimmon's statement on Wednesday, the private average sales rate for the year ending December 31, 2023, declined to 0.58 per outlet per week, compared to 0.69 in 2022. However, the sales rate for the fourth quarter improved to 0.41 from 0.28.

Despite a decrease in the volume of new home legal completions to 9,922 from 14,868 compared to the previous year, Persimmon exceeded its guidance of 9,500 homes. The average selling price of new homes also saw an increase to £255,750 ($325,083) from £248,616 year-on-year, while private average selling prices rose to £285,770 from £272,200.

The company reported a total forward sales value of £1.06 billion as of December 31, 2023, compared to £1.04 billion in the previous year.

Looking ahead, Persimmon anticipates highly uncertain market conditions for 2024. However, it notes that mortgage rates are starting to ease and building costs are gradually moderating. The company remains positive about the long-term demand outlook for new homes.

"We have seen strong customer response to Persimmon's offerings throughout the year, with relatively robust sales rates. To position the business for sustainable growth when conditions improve, we have effectively managed costs while making strategic investments," commented Chief Executive Dean Finch.