August 23, 2016 / 6:19 AM / 3 years ago

Builder Persimmon shrugs off Brexit as reservation rate rises

LONDON (Reuters) - Persimmon (PSN.L) has seen a jump in reservations by buyers of new homes over the last two months, the British housebuilder said on Tuesday, despite some surveys suggesting the vote to leave the European Union could cool the housing market.

File photograph shows homes under construction at a Persimmon site in Dartford, southern Britain August 21, 2015. REUTERS/Neil Hall/File Photo

Property was one of the sectors hardest hit by the June 23 referendum with the biggest builders and estate agents seeing their share prices plunge and investors pulling money from commercial funds, leading many to be suspended.

Persimmon said there had been a 17 percent year-on-year increase since July 1 in its reservation rate — where buyers pay a fee to take a home off the market.

“There is very good underlying demand out there,” CEO Jeff Fairburn told Reuters.

“The market is well-supported by good mortgage products and we are focused on the first-time buyers and first-time movers at the lower end of the market,” he said.

Persimmon does not build in central London, the most expensive part of the market, where prices are beginning to fall according to some surveys.

The company reported a 29 percent increase in first-half pretax profit to 352 million pounds and the positive comments pushed its shares up 3 percent to 1849 pence by 0745 GMT.

It could be less exposed to the impact from the Brexit vote, which is likely to affect the London property market most due to the large number of foreign buyers and buy-to-let investors.

Britain’s biggest housebuilder Barratt (BDEV.L), which does build in central London, said last month that it might slow the pace of construction and rethink its land buying programme to prepare itself for a slowdown.

The price of homes for sale in England and Wales fell in August, posting the biggest drop since November, property website Rightmove said earlier this month, with the largest fall recorded in London and the South East.

Reporting by Costas Pitas; Editing by Paul Sandle/Keith Weir

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