UK housebuilder Persimmon flags slowing demand amid surge in mortgage rates

PERSIMMON, Britain’s second-largest housebuilder, said on Tuesday (Nov 8) its sales rate slipped further in the last six weeks, as the political and economic turmoil in the country and a deepening cost-of-living crisis affected sentiment.

The UK housing market has been showing signs of a slowdown in recent months as surging inflation hits consumers’ budgets and the Bank of England raised interest rates. On top of that, the government’s mini budget in September has led to a surge in mortgage rates.

“Rising interest rates and broader economic uncertainty are clearly impacting mortgage lending and customer behaviour,” chief executive officer Dean Finch said in a statement.

British house prices fell in October at the fastest monthly rate since February last year after the government’s US$51.61 billion unfunded package of tax cuts created a turmoil in the market, while analysts at HSBC have warned that the UK is on the cusp of a housing downturn.

York-based Persimmon, which offers a range of homes from studio apartments to five-bedroom houses, said its average net private weekly sales rate per outlet stood at 0.60 between July 1 and Nov 7, compared with 0.78 a year earlier.

It dropped further to 0.48 in the last six weeks of the reported period. REUTERS