Persimmon's home sales hit by labour and materials shortages

PERSIMMON, the UK's largest homebuilder, reported lower than expected home sales in the first half of the year as the company faced planning delays, materials and labour shortages.

"Delays in the planning system, disruption in material supply chains and challenges in securing labour have impacted completions in the period," Persimmon chief executive officer Dean Finch said in a statement on Thursday (Jul 7). "We anticipate, however, profit at the half year to be modestly above our expectations reflecting strong demand and positive pricing conditions."

The UK's housing market is showing signs of slowing after a period of rampant price growth as rising interest rates and inflation curtail buyers' ability to service large mortgages. Still, the lack of stock available to buy and low rates of construction have helped offset the ailing demand, allowing homebuilders to continue raising prices to absorb higher costs.

The company sold 6,652 homes in the 6 months through June, down from 7,406 a year earlier, a larger drop than expected, according to the statement. The impact of inflation is being countered by increasing house prices and the company's growing pipeline of sales means it now expects to report half year profits above expectations, despite the supply chain chaos, Persimmon said. BLOOMBERG