Newspaper article The Evening Standard (London, England)

Persimmon Hits Outs at Property 'Scaremongers'; City Briefing

Newspaper article The Evening Standard (London, England)

Persimmon Hits Outs at Property 'Scaremongers'; City Briefing

Article excerpt


BRITAIN'S most valuable housebuilder, Persimmon, today hit out at the media for knocking confidence in the property market as it predicted a surge in sales in the new year.

Chief executive John White said headlines screaming about a crash had dealt more of a blow to the sector than interest rate rises from the Bank of England.

The market could even absorb another rate rise to 5%, he added.

"I don't think the market would necessarily be harmed as long as there's not a lot of headlines about the effect on house prices," he said.

"There is plenty of interest in buying a new home, it's not been transformed into sales at the moment as people have been holding back. We expect an upturn in the spring."

It is not the first attack by a company on the way the media have covered the housing downturn as the Bank tackles rampant house price inflation, which is expected to slow dramatically next year after yet another bumper year.

A bullish trading statement from Persimmon today showed its average selling price is likely to be up 11% in 2004 at [pounds sterling]172,000. White expects growth in the market as a whole of "around 3%" next year.

Persimmon's confidence in the market comes despite another gloomy report on the sector today, this time from the Royal Institution of Chartered Surveyors.

RICS said house prices fell at their fastest pace for 12 years last month with almost two-thirds of its members reporting a drop.

However, it did add that potential buyers are regaining interest.

Persimmon is seen as the pick of the sector by analysts given its strong landbank - today put at 59,000 plots - and geographical spread of properties.

Completions are up 2% at 12,400.

The company said it was on course to report full-year profits in line with expectations and confirmed it is likely to raise the final dividend 25%.

Persimmon's shares climbed 111/2p to 690p, giving the company a market value of almost [pounds sterling]2 billion and strengthening its case for promotion to the FTSE 100.

White said: "It's a question of when, not if. …

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