UK homebuilder Persimmon sees 2027 volume growth but flags cost pressures

Persimmon Sees 2027 Housing Volume Gain Amid Rising Construction Costs

Persimmon's Outlook and Strategies in a Challenging Market

2027 Housing Volume Forecast and Profit Expectations

Nov 12(Reuters) - Persimmon forecast a further increase in housing volumes in 2027, supported by its land pipeline, but expects near-term profits to be held back as Britain's homebuilding sector grapples with rising construction costs.

2026 Performance and Cost Management Initiatives

The FTSE-100 company, which raised its annual home completions forecast earlier in the year, said on Thursday it expects to deliver 2026 performance in line with market forecasts and that it had identified actions to offset Iran-war-related increase in construction costs, without giving details.

CEO Statement on Strategy and Sector Performance

"Our clear strategy has allowed the Group to increase both sales and planning approvals at a time when the overall sector is declining," CEO Dean Finch said in a statement.

Market Reaction

Persimmon shares were up 4% in early trading.

Current Market Conditions and Company Resilience

Britain's housing market is struggling with rising mortgage costs and pressure on consumer finances.

Vertically Integrated Model and Cost Mitigation

Persimmon's vertically integrated model, which includes the production of key building materials such as bricks, timber and tiles, has helped to limit the impact of higher building costs.

Impact of Energy Prices on Material Costs

However, soaring energy prices have increased costs of manufacturing materials and are expected to be a headwind in 2026 and 2027.

First-Time Buyer Subsidy and Sales Performance

The company said it was too early to assess the impact of Britain's first-time buyer subsidy on 2027 performance, but that it was well-placed to play a leading role in its delivery over time, noting that 35% of its private sales from January to November 1 were to first-time buyers.

Private Forward Sales Position

The company's current private forward sales position has increased to £2.15 billion ($2.85 billion), compared with £2.09 billion a year ago.

Additional Information

($1 = 0.7543 pounds)

(Reporting by Simone Lobo in Bengaluru. Editing by Jochelle Mendonca and Mark Potter)