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Housebuilder Persimmon cashes in on booming UK housing market with 57% surge in profits

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Housebuilder Persimmon cashes in on booming UK housing market with 57% surge in profits

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Published by Jon Land for 24dash.com in Housing

Housebuilder Persimmon cashes in on booming UK housing market with 57% surge in profits Housebuilder Persimmon cashes in on booming UK housing market with 57% surge in profits

Housebuilder Persimmon has reported a 57% surge in profits as it cashes in on the booming UK housing market.

Pre-tax profits for the six months to 30 June, rose to £208.9 million compared to £132.9 million last year.

Persimmon also reported new home sales (6,408) were up by 28% and revenue increased by 33% to £1.2 billion.

The housebuilder also reported strong land investment with 14,251 plots of land secured in the period bringing its consented landbank to 82,250 plots.

Persimmon chief executive Jeff Fairburn said: "Persimmon has produced another strong performance in the first half of 2014, taking advantage of the current market opportunities to deliver growth whilst strengthening the financial position of the business.

"These results demonstrate the ability of the group to successfully execute its operational objectives to deliver the 10-year strategic plan launched in 2012. We remain confident of Persimmon's continued successful development."

Yesterday, Bovis Homes published similarly positive resultes, reporting a 166% rise in pre-tax profits for the same period.

The company's revenues grew by 75% to £322m, and profit before tax went up to £49.4m, up from £18.6m during the same period in 2013.

Bovis said sales prices were on average 20% higher because of "modest improvements" in house prices.

Despite the profits bonanza, housebuilders are still failing to build enough homes, particularly of the affordable variety, to keep up with the projected 240,000 required each year.

A study published in June by accountancy firm BDO found that most executives in housebuilding companies - 95% of those surveyed - thought that the target (set by the previous Labour government but dropped by the coalition) was still “unachievable”.

One in four of the house building executives who were questioned by BDO doubted that the target would ever be reached.

Planning red tape and limited land availability were seen as the biggest barriers to building in the UK.

Ed Goodworth, real estate partner at BDO, said that housebuilders had now reached “a critical point”. He said that the government either had to “fix the system or face the biggest housing shortfall since the 1950s”.

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