Published by Global Banking & Finance Review®
Posted on August 13, 2025
2 min readLast updated: January 22, 2026
Add as preferred source on GooglePersimmon forecasts increased home sales in 2026 but faces margin concerns due to higher costs, impacting shares.
By Raechel Thankam Job
(Reuters) -British homebuilder Persimmon beat first-half profit expectations and forecast higher home sales in 2026 on Wednesday, but caution about next year's margin growth weighed on shares as higher costs and affordability concerns persist.
Marketing campaigns such as a reduced upfront deposit and strong pricing helped first-half deliveries and earnings, but elevated interest rates and sticky inflation in Britain's slowing economy still pose a concern as the industry grapples with weak demand.
"As we look ahead, the pace of margin progression will be impacted by diminishing embedded build cost inflation, on-going affordability constraints and increased industry-wide costs," the company said in a statement.
Shares fell as much as 3%, putting it among the biggest losers on the FTSE 100.
Persimmon's caution mirrors that of rivals Taylor Wimpey, Vistry, and Berkeley, which have all warned that challenges are likely to persist throughout the year.
"Some caution highlighted around FY26 margin progression is likely to dampen the enthusiasm around scale of profit growth in 2026 for some in the market, but a good performance and delivery overall," said Investec analyst Aynsley Lammin.
In 2026, Persimmon expects to deliver about 12,000 homes, compared with its 2025 target of 11,000 to 11,500 homes.
Operating margins this year are expected to come in at 14.2% to 14.5%, with 2026 levels expected to be similar, it said.
Lammin said the 2026 margin forecast could lead to a downgrade of analysts' profit estimates.
The company, which operates under the brand names Persimmon Homes, Charles Church and Westbury Partnerships, reported a rise of 11% in underlying pre-tax profit for the first half ended June 30 to 164.9 million pounds, beating the 161.1 million analysts expected in a company-compiled poll.
(Reporting by Raechel Thankam Job and Yadarisa Shabong in Bengaluru; Editing by Rashmi Aich and Clarence Fernandez)
Operating margins measure a company's operating income as a percentage of its revenue. It reflects the efficiency of a company in managing its core business operations.
The housing market refers to the supply and demand for residential properties. It encompasses various factors, including home prices, sales volume, and economic conditions affecting buyers and sellers.
Interest rates are the cost of borrowing money, expressed as a percentage of the total loan amount. They influence consumer spending, investment, and overall economic activity.
Sales growth is the increase in a company's sales over a specific period, often expressed as a percentage. It indicates the company's ability to expand its market presence and revenue.
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