Home buyers are back - Persimmon

Home buyers are returning to the market said house builder Persimmon yesterday, as it reported improved trading in the third quarter as well as lower debt.

"The market is encouraging. Buyers are back. Prices have stabilised and there is growing availability of mortgages," said chief executive officer Mike Farley.

The UK's largest house builder by market value said it met its sales targets for the year and booked a further £500 million of sales for next year.

Persimmon added its debt position at the year-end will be "significantly lower" than its previous guidance of £400 million, enabling it to purchase new land and open outlets.

"The focus now is on growing our margins, we are comfortable with our level of debt," which stood at £399 million at the end of last month, said Mr Farley.

"The key area of outperformance is the group's cash position and we believe that this should be taken positively by the market," said analysts at Panmure Gordon.

The builder, which now expects to complete 9,000 homes this year, said the average selling prices of homes reserved is six per cent higher than at the start of July at $173,000.

The latest housing data and comments from rivals indicate house prices are nudging higher.

British house prices last month recorded their lowest annual fall since March 2008 and a 1.2 per cent rise from September according to mortgage lender Halifax. This is the fourth successive monthly increase in house prices.

Taylor Wimpey and Redrow both gave buoyant trading updates earlier this month, reporting stabilising sales and house prices edging upwards.

The York-based company said it had sold more houses, particularly two or three bedroom homes, over flats, but first-time buyers are being tempted back to the market, making up 18 per cent of the builder's order book in terms of reservations, up from 10 per cent a year ago.

However, low availability for higher loan to value products still remains a concern, despite growing customer interest in programmes such as the government's HomeBuy direct scheme, said the builder.