Property boom proves handy about the house
Wed 02 Jul 2014
Builders and home improvement groups are enjoying the fruits of Britains housing boom with two companies reporting growing revenues and improving consumer confidence. Persimmon said turnover jumped by 33 per cent in the first half of the year as it benefited from a rise in its average sale price and the growing popularity of the larger, family homes that it builds Revenues at the FTSE 100 developer rose from 900 million to 1.2 billion in the six months to June 30. The group said yesterday rules on mortgage lending would damage its sales, or that housing market growth was unsustainable. Over the past 12 months, Persimons average sale price rose by 4 per cent to 186,000, while house sales increased from 5,022 to 6,408. The group, which concentrates on building around London, said that it was confident about sales in its regional markets as well as in the capital. Sales at Topps Tiles also reflected the buoyant market, with like-for-like revenues growing by 6.3 per cent in the third quarter. This compared with a fall in revenues of 1.5 per cent for the same period last year. The group said that low prices, online sales and a wide range had helped it to grow ahead of the overall tile market. Pre-tax profit rose from 4.7million to 8million in the half-year to April as likes-for-like sales gained 10.2 per cent. Is also said that it had completed the refinancing of a 64million loan until May 2019. The company, which has 330 stores in the UK, said that it was boosted by favourable consumer sentiment and that it was confident about its performance for the rest of the year. The Bank of England announced curbs last month on mortgage borrowing to tackle fears over the growth of household debt, while new affordability tests are forcing lenders to conduct stricter assessments of borrowers. In its trading update yesterday, Persimmon said the new disciplined approach by lenders would ensure that mortgage lending practices remain sustainable. However, in a sign of nervousness about the stability of the housing market, Chestertons, the upmarket London estate agent, has appointed advisors to explore the possibility of a sale. Chestertons, the upmarket London estate agent, has appointed advisors to explore the possibility of a sale. Chestertons, which is owned by Mercantile Group, an investment firm, is understood to have appointed Cavendish Corporate Finance to help it to find a buyer. The 209-year-old estate agency is expected to attract interest from private equity firms and rival estate agents. Its sale would follow the floatations of the competitors Foxtons and Countrywide, as well as Zoopla, and property listings website. It is understood that Chestertons would go for more than the 50million that Marsh & Parsons a smaller rival, was sold for in 2011. Any disposal would not include Humberts, an estate agency with 27 offices, which was split from Chestertons this year.