Persimmon leads housebuilders up on hopes for 2024
Despite a warning that 2024 may be tough, Persimmon has said that there will be opportunities. As IGTV’s Jeremy Naylor explains, this has seen the FTSE 350 house construction sector rise to near recent highs.
Persimmon says that the business enters 2024 with private forward sales ahead of last year driven by the year-on-year improvement in Q4 sales rates. Those rates, at the end of 2023, did show an improvement, although the year as a whole saw the company deliver the keys on just 9,922 completed properties, down 33% from the 14,868 builds in 2022. Average selling prices were up 3%, but that was less than the build cost inflation that the company saw last year which has led to a shortened cash position at the end of 2023 at £420 million vs £862 million in 2022.
(AI Video Summary)
Persimmon looking up as tough 2024 ahead for housing
UK housebuilder, Persimmon, announced that the housing market is tough and unpredictable as we head into 2024. However, things are looking up for Persimmon, as they have seen improvements in sales rates during the fourth quarter. Even though they sold fewer homes last year compared to the previous year, Persimmon is still making money and keeping up with the rising costs. This positive news has caused their stock to increase by 3.5%, and other housebuilders like Barrick Developments and Taylor Wimpey are also experiencing gains.
Barclays releases positive housing sector statement
Barclays, a well-known broker, has released a positive statement about the housing sector, which has had an encouraging impact. As a result, the FTSE 350 Household Goods and Home Construction Index has reached its highest level since June 2022, suggesting that the housebuilding industry is starting to gain positive momentum. Additionally, mortgage rates are decreasing, which could further support the housing market.
Overall, it seems like things are looking up for the housebuilding industry. Despite the challenging market conditions, Persimmon and other companies are finding ways to succeed and make a profit. This positive trend is reflected in the rising stock prices and the FTSE 350 Index's performance. In addition, the lowering mortgage rates are making it more affordable for people to buy homes, which can further stimulate the housing market.
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