Money News

UK builders Persimmon, Vistry point to recovery after weak first half

(Reuters) - British homebuilders Persimmon and Vistry said on Thursday interest in new homes had picked up since coronavirus restrictions on the housing market eased in mid-May, propping up order books for this year and supporting prices.

Persimmon’s revenue dropped 32% to 1.19 billion pounds ($1.5 billion) for the six months ended June 30, and Vistry’s revenue from housebuilding activities slumped 59.7% to 344 million pounds as the UK housing market ground to a halt.

Both said construction and sales activity had picked up in the past six weeks, however, and Vistry said it expected a stamp duty exemption announced by the government this week would support buyers in the months ahead.

Shares in the two builders gained 5% and 2% respectively, building on a rally in the previous session in response to the government’s stimulus plans.

Britain’s housing market, crucial to a credit-fuelled boom in domestic demand stretching back two decades, had already been shaken by Brexit worries about the economy before the launch of widespread lockdowns in March.

Data this week showed prices fell for a fourth straight month in June as COVID-19 restrictions continued to depress the market, the longest run of monthly declines since 2010.

Prime Minister Boris Johnson’s government, however, laid out a wide-ranging programme on Wednesday of support aimed at fending off job losses and a deep recession in the second half of the year that might trigger a deeper house-price plunge.

Persimmon, the UK’s second-largest homebuilder, said the value of its forward sales of new homes as at June end was 15% ahead of last year at 1.86 billion pounds and that pricing was “resilient”.

Housing reservations at Vistry were also up to 1.66 billion pounds at the end of June from the 1.5 billion pounds on May 20.

($1 = 0.7913 pounds)

Reporting by Samantha Machado in Bengaluru; Editing by Rashmi Aich, Patrick Graham and David Evans