A strong trading update from UK housebuilder Persimmon (PSN) has triggered a rally across the sector. House buyers have apparently shrugged off the shock of the snap general election, and its surprising outcome with private sales up 7% during May and June.
This was a highlight for Aynsley Lammin, an analyst broker Canaccord Genuity.
‘Consensus is likely to move up on both margins and volumes by 2% to 4% at this stage but could be higher over the rest of the year,’ he says.
Persimmon's trading figures were also impressive for the first half of the year to 31 December 2017. These show overall sales up 12% to £1.66bn thanks to strong customer demand. Completions, or new homes built, increased 8% to 7,794, 556 more than in the first half of 2016.
Optimism around Persimmon has filtered right through the UK house building sector, as illustrated below.
| Stock | Rise in share price |
| Persimmon | 2.90% |
| Crest Nicholson | 2.90% |
| McCarthy & Stone | 2% |
| Barratt Developments | 2% |
| Bellway | 1.60% |
| Taylor Wimpey | 1.60% |
| Redrow | 1.60% |
| Berkeley | 1.50% |
| Bovis Homes | 1.20% |
| Galliford Try | 0.90% |
| Countryside Properties | 0.40% |
Other pluses from the sector today include upbeat announcements from McCarthy & Stone (MCS) and MJ Gleeson (GLE).
McCarthy continues to take advantage of a rapidly ageing population and less housing options for older people, a gap it is helping to fill. A modest slowdown in sales in recent weeks - blamed on the election - can be balanced by an increase in forward orders, swollen to £241m since March.
However, the company warned there might be a modest impact on the timing of converting reservations into completions.
Housing regeneration specialist MJ Gleeson (GLE) says it expects full year results to be at the top end of previous expectations. The company sold 1,013 homes in its full year to 30 June 2017, a 12.1% increase compared to the previous 12 months. That represents success in its annual 1,000 new homes built a year, and target it plans to double within five years.
N+1 Singer analyst James Tetley says: ‘Given management’s track record and the platform that has been built, we have every confidence that this can be achieved.’
Shares in MJ Gleeson jumped 6.6% to 667.2p.
