Persimmon profits jump to nearly £1bn as UK house price boom continues

theguardian.com:

Britain’s biggest housebuilder, Persimmon, has announced profits of nearly £1bn in 2021, but cautioned that the Ukraine invasion could disrupt the the UK economy in the year ahead.

Persimmon’s profits jumped by nearly a quarter to £970m thanks to “positive pricing conditions” in every British region in which it operated, as the house price boom defied the coronavirus pandemic, it said on Wednesday.

Dean Finch, Persimmon’s chief executive, said he was “mindful of the growing risk of an economic impact as a result of the tragic conflict in Ukraine”, but that he expected continued house price rises to “mitigate build cost inflation”, suggesting higher costs for materials and labour would be passed on to buyers.

“The UK housing market remains supportive with demand continuing to exceed supply, favourable interest rates and good levels of mortgage availability,” he said.

Persimmon said it had some built-in protection from increased materials costs, which could be further escalated by the Russian invasion, because it had increased capacity at factories producing timber frames, bricks and tiles.

Vistry, the sixth biggest London-listed housebuilder, also announced bumper results on Wednesday, saying it had more than tripled its annual profits to £320m.

Housebuilders in the UK have benefited from years of strong demand, thanks to a dearth of new homes. Nationwide, the UK’s largest building society, reported on Wednesday that prices of homes on which it offered mortgages increased by 12.6% in the year to February, with the average price crossing the £260,000 mark for the first time.

Many analysts had expected the pandemic to end the extraordinary price increases, but a combination of unprecedented low interest rates and employment