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- The average price of houses sold by Persimmon has gone up by £14,000 as compared to last year.
- Persimmon’s rival firm Taylor Wimpey has also reported 2022 sales as of now in line with the 2021 levels.
The UK housing market has boomed since the country was hit by the pandemic two years ago, and the trend of rising house prices is continuing despite rising labour and material costs. One of the leading British housebuilding companies, Persimmon plc (LON: PSN), is selling houses at a significantly higher average price now, with the price going up by £14,000 as compared to the last year.
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According to property website Rightmove Plc, asking prices for UK houses have hit a record high level in April. Persimmon’s rival firm, Taylor Wimpey (LON: TW.), has also reported the 2022 sales as of now in line with the 2021 levels when the property sales tax holiday led to high demand for houses.
As per the latest figures, there has been an increase of £14,000 in the average prices of houses sold by Persimmon over the last year, with the price going up from £252,000 to £266,000. According to the housebuilders, its weekly sales rates have gone up by approximately 2% as compared to last year. The group has declared that its trading in 2022 has been as it had expected till now, with the year-to-date forward sales standing at £2.8 billion. However, this figure stood at £3 billion last year when the housing sector got substantial support from the Boris Johnson Government.
By the first half of 2022, Persimmon aims to set up 75 new outlets, more than 50% of which have already been opened in the first quarter itself. With approximately 300 active outlets, Persimmon aims to further expand its business in the UK and become the top UK housebuilder. Working with its smaller rival company, Taylor Wimpey, it has been trying to reduce the slowdown caused by soaring inflation amid the shortage of properties in the booming housing market.
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Persimmon expects to show solid growth despite the uncertainties in the market, rising interest rates, and falling consumer confidence. The shares of Persimmon plc were up by 1.06% at around 11:00 AM (GMT+1) on 28 April 2022, at GBX 2,095.00.
The housebuilding company, which is a constituent of the FTSE 100 index, hasn’t performed well over the past year and thus its returns on both -- a one-year basis and year-to-date basis -- have been negative, as of 28 April 2022, standing at -33.41% and -26.63%, respectively. The market cap of the company stands at £6,628.41 million as of 28 April 2022.
As mentioned above, Taylor Wimpey is a rival company of Persimmon and is among the biggest home construction companies in the UK. With its sales being in line with the 2021 levels, the value of the company’s order book has gone up from £2.8 billion last year to £2.9 billion now. Taylor Wimpey aims to capitalise on the house price growth and reportedly believes that this growth is offsetting the impact of soaring inflationary pressure.
As per recent reports, Taylor Wimpey is all set to pay £80 million more on fire safety work, taking the total spend for the remediation work to £245 million, in line with its commitments towards the government’s building safety pledge. The housebuilder, which is a constituent of the FTSE 100 index like Persimmon, has also not performed well in the past, with its returns as of 28 April 2022 standing at -30.48% and -27.33% on a one-year basis and a year-to-date basis, respectively.
With a market cap of £4,485.48 million, Taylor Wimpey’s shares were up by 2.21% at around 11:45 AM (GMT+1) on 28 April 2022, at GBX 127.45.
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