UK Housebuilders to Illuminate Property Market Amid Government Goals
Major UK housebuilders are set to reveal insights on market demand as the Government targets housing supply reform
UK, Housebuilders, Property Market, Government, Persimmon, Taylor Wimpey, Vistry
London: Some of the UK’s top housebuilders are gearing up to share if demand is bouncing back in the property market after a tough stretch. This comes as the Government is looking to shake up planning rules.
Next week, companies like Persimmon, Vistry, and Taylor Wimpey will be giving updates on their trading. Persimmon, for instance, is set to talk about its fourth-quarter performance on Tuesday.
They recently mentioned that buyer interest has picked up since interest rates were cut in the summer. In November, Persimmon said it aimed to sell around 10,500 homes in 2024, which is a bit more than the 9,922 homes sold in 2023.
They believe that better customer sentiment is driving the demand for new homes, especially as borrowing costs have dropped, making it easier for buyers.
Aarin Chiekrie, an analyst at Hargreaves Lansdown, pointed out that Persimmon has had its share of challenges lately, with sales dropping more than the overall market. But he noted that there are some hopeful signs in the numbers.
While the sales rates and price hikes are modest, they’re still a bit of a bright spot in a generally declining trend.
Investors are keen to hear about the rising costs of building, which have started to creep up again, putting pressure on construction companies. Persimmon also mentioned that it would face higher national insurance costs starting in April, which they’re trying to manage.
On the flip side, Taylor Wimpey reported a stronger performance in its last update in November, saying it’s on track to sell between 9,500 and 10,000 homes, which is at the higher end of what they expected.
They’ll be sharing their latest trading update on Thursday. Taylor Wimpey also expressed support for the Government’s efforts to tackle the UK’s housing supply issues and unlock the planning system, which they believe will help with land availability.
The Labour Government has committed to building 1.5 million homes by the end of its term and recently announced changes to planning rules that will set mandatory building targets for councils in England.
Chiekrie mentioned that easing planning restrictions would be beneficial for Persimmon, given its large land holdings and lower average selling prices.
Meanwhile, Vistry has had a rough time, issuing its third profit warning in three months back in December, citing delays in some projects and home completions pushing into 2025.
Despite that, they’re feeling more optimistic about this year, expecting better opportunities for deals to come up. Vistry focuses on affordable housing and collaborates with local authorities and housing associations, and they’ve said they want to play a key role in the Government’s housing plans.
Vistry will update investors on its financial performance this Wednesday.