Flat third quarter sales are dragging on Persimmon (PSN) on Wednesday. Shares in the UK’s second largest housebuilder decline 3.2% to £27.81 as the company reports modest year-on-year comparisons for the three months to 7 November.
Today's announcement is also rippling through the rest of the UK's housebuilding sector. The share prices of FTSE 100 peers Barratt Developments (BDEV), Berkeley (BKG) and Taylor Wimpey (TW.) are all down in response.
Is this a sign that the rally in the housebuilding sector is on borrowed time? That is what Shares speculated in this article earlier this month.
ON THE BRIGHT SIDE
Possibly, but there are more positive pointers to take from today’s Persimmon update. For a start, the company reports being fully sold up for the rest of this calendar year. Persimmon also has a substantial £909m worth of forward sales reserved. That's 10% more than 12 months ago.
Persimmon also notes that after a July and August lull, activity has picked up as usual.
Counter-balancing these positives is the company's ongoing frustration with the UK's labyrinthine planning process. This remains a common complaint across the industry despite political rhetoric to streamline the process.
Persimmon also points to a tightening market for trade skills and materials.
HELP TO BUY
According to Liberum the Help to Buy scheme is used on more than half of Persimmon’s completed sales. The next few weeks could be pivotal for the sector as we await to see if there will be further state support for housebuilding in the UK Budget on 22 November.
Before then several of Persimmon’s sector peers are set to report on trading - the table below shows who is reporting when.
| Company | Date of trading update |
| Taylor Wimpey | 13 November |
| Bovis Homes | 14 November |
| Barratt Developments | 15 November |
