Home sales escalate despite trade war apprehensions, according to Persimmon, a prominent property company.
Unfiltered, Unbridled Review:
Amidst the economic tremors stirred by the trade war, Persimmon, a major UK housebuilder, stands unfazed. The company announced a robust start to 2025, with forward sales surging past £2.3 billion – a 12% leap from the same period last year. Private sales soared an impressive 17%, hitting almost £1.7 billion.
Average private home prices rose by 4% to an eye-popping £293,300, and the net private sales rate per outlet, excluding bulk purchases, climbed 3% to 0.65 per week. Despite the macroeconomic uncertainty, Persimmon declared that neither their supply chain nor sales rates have felt a chill yet.
Since Persimmon doesn't engage directly with the US market, they're spared significant exposure to President Trump's tariffs. Early April saw Trump imposing a 10% tariff on goods imported from the UK and a 25% duty on foreign steel and aluminum goods.
Dean Finch, Persimmon's chief exec, notes that they've experienced no immediate impact on their business or customer confidence due to recent geopolitical uncertainty. As a result, Persimmon continues to project completing between 11,000 and 11,500 homes this year.
However, they remain vigilant towards economic uncertainties and their possible impact on mortgage rates and consumer spending. Britain's housing market has weathered some tough times over the past three years, with inflation driving up borrowing costs.
Despite the challenges, every major British lender now offers fixed-rate mortgage deals of less than 4% in anticipation of future base rate cuts by the Bank of England. That reduces the immediate pressure on mortgage rates, at least for now.
According to industry analyst Adam Vettese, potential homebuyers and movers will continue tracking interest rate movements closely, waiting for the best possible deals. Vettese believes that Persimmon's focus on affordable homes, priced below the national market average, positions them well in a market recovering from rough seas.
Persimmon increased home constructions last year by 7% to 10,664 units, partly due to a surge in private completions that offset a decline in partnership houses. Persimmon shares were up 1.2% at £13.11 on 1 May 2025, though they've slid about 38% over the last three years.
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Inside Info:
Based on recent reports from Persimmon's leadership and industry analysis:- Mortgage rates have not been directly affected by geopolitical uncertainty in the near term, according to Persimmon's 1 May 2025 statements [2][5]. However, the company cautions that broader economic uncertainty linked to geopolitical tensions could influence future mortgage rates and consumer confidence [2][5].- Consumer spending shows no immediate downturn, with Persimmon reporting a 17% rise in private forward sales and improved selling prices to start 2025 [4]. The company emphasizes that its current performance remains strong, with expectations of delivery patterns similar to 2024 [3][4].
While trade war impacts are not explicitly detailed, Persimmon’s remarks align with broader 2025 predictions of gradually declining interest rates (e.g., NAHB forecasts averaging 6.65% in 2025 [1]), which could mitigate future mortgage-rate risks if realized. Consumer spending resilience in housing appears intact based on current data [4].
- Persimmon, a UK homebuilder, has reported a strong start to 2025, with increasing forward sales and rising average private home prices, despite the ongoing trade war and economic uncertainties.
- The company, which doesn't engage directly with the US market, has stated that they have not yet felt the chill of geopolitical uncertainty, and continue to project completing between 11,000 and 11,500 homes this year.
- Despite the potential impact of economic uncertainties on mortgage rates and consumer spending, the British housing market appears resilient, with every major lender offering fixed-rate mortgage deals of less than 4%.
- Persimmon's business strategy, focusing on affordable homes priced below the national market average, is seen as advantageous in a recovering market, according to industry analyst Adam Vettese.
- For those interested in investing, DIY investing platforms like AJ Bell, Hargreaves Lansdown, interactive investor, InvestEngine, and Trading 212 are available. However, it's important to note that This is Money may earn a commission based on your investment decisions.
