Persimmon warns of build cost inflation

Housebuilder Persimmon is on track to meet its target of 10,500 completions this year, its top team saying it is “optimistic about our growth prospects” but adding that build costs are rising again and that the implications of the recent Budget remain unclear. In a trading update for the period since 1 July, the company said it delivered 1,416 homes, down slightly from 1,439 in the same period of 2023, including a 3% increase in private homes to 1,267 and 149 partnership homes. The company said: “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. “Early announcements from the government around planning reforms have been encouraging. We look forward to the outcome from the consultation on the National Planning Policy Framework later this year.” Chief executive Dean Finch added: “Positive momentum in the business continued over the summer months and we remain on track to deliver growth in completions to circa 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. We continue to position the business for success, maintaining our focus on quality and customer service, and converting our land holdings into active developments.”