Persimmon Rises to Highest Since 2007 on 25% Increase in Sales

Persimmon Plc (PSN), the U.K.’s largest homebuilder by market value, said sales rose 25 percent in the second half after the government introduced lending programs to boost homeownership. The shares climbed to the highest since June 2007.

Sales increased to 6,506 homes from 5,191, the York, England-based company said today in a statement. Revenue rose 21 percent in the whole of last year to 2.1 billion pounds ($3.5 billion), while sales volume climbed 16 percent.

“We have seen good levels of interest for Help-to-Buy,” Chief Executive Officer Jeff Fairburn said in an interview. “It’s certainly enabled more people to buy new houses.”

Home values in the U.K. increased by 8.4 percent last year, the biggest annual gain since 2006, according to Nationwide Building Society. Prime Minister David Cameron’s coalition government introduced a second phase of Help-to-Buy in October, enabling buyers with a down payment of as little as 5 percent to purchase a home valued as high as 600,000 pounds. The government can also provide an interest-free loan of as much as 20 percent of a home’s value under the policy.

Persimmon rose as much as 3.8 percent to 1,343 pence, the highest since June 2007. The shares were up 1.8 percent to 1,317 pence at 8:20 a.m. in London trading.

Forward Sales

The average selling price of a Persimmon home increased 4 percent last year to 180,900 pounds. The company had sales agreements with buyers for homes valued at 908 million pounds at the end of December, 41 percent more than a year earlier.

Demand for Persimmon’s part-exchange program, where the builder acquires a buyer’s home as part of the deal, has continued to rise, Fairburn said. Help-to-Buy, which features a low down payment, “will support that additional business for us,” he added.

Wales was a “little more challenging market” in 2013, Fairburn said. The introduction of Help-to-Buy in the region this year “will support the market and we’ll see an improvement there as well,” he said.

Persimmon said it will release its full results for 2013 on Feb. 25.

To contact the reporter on this story: Neil Callanan in London at ncallanan@bloomberg.net

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net

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