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Persimmon records strong start to year after pandemic knocked profits in 2020

 (Persimmon)
(Persimmon)

Housebuilder giant Persimmon said profits fell last year, but it has seen the value of its forward order book rise to £2.3 billion, with customer demand boosted by the stamp duty holiday.

The firm said the value of homes customers have put orders in for so far in 2021, is up 15% year on year.

It added that growth has been “supported by low interest rates, good mortgage availability and ongoing Government support measures”.

Chancellor Rishi Sunak is today set to announce in the Budget further measures that could boost the industry, including a new government-backed mortgage guarantee scheme to help buyers get on the property ladder.

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FTSE 100 company Persimmon posted 2020 results that showed how disruption at the start of the pandemic knocked sales and profits, but the performance was stronger in the second half.

Pre-tax profits last year dropped to £783.8 million from £1 billion, while revenues decreased to £3.3 billion from £3.4 billion.

WATCH: How much money do I need to buy a house?

At the start of the first lockdown, physical viewings of properties were off the cards. Meanwhile a number of building sites were closed, and when they reopened social distancing measures had to be implemented.

But the firm was boosted in the second half by a stamp duty holiday, and there was pent-up customer demand once restrictions in the residential market were eased.

Chief executive Dean Finch, who joined the business in September from National Express where he was boss, said there has been a “strong start” to this year.

Finch replaced Jenkinson who made efforts to improve Persimmon’s reputation following a turbulent period. The firm had faced some complaints about construction quality and bonus payments.

Last month Persimmon said it has set aside £75 million to address cladding safety issues in some of the developments it has previously worked on.

It made that provision in its 2020 results to contribute to any necessary work on 26 buildings that may be affected by the cladding issue.

Numerous flat owners are facing huge bills for fire-safety improvements that have emerged following the tragic Grenfell blaze in 2017.

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