Property boom to continue, says Persimmon

Persimmon, Britain's biggest housebuilder, yesterday predicted that the property boom would continue, fuelled by lower interest rates and a shortage of land.

August, traditionally a slack period, has seen no let up in the momentum, according to company chairman Duncan Davidson. "People have been queuing up to buy, we are seeing very good sales," he said.

The upbeat assessment, a week after a similarly positive message from Berkeley Group, has been reinforced at Persimmon by a successful takeover of Beazer in March.

The enlarged group reported a 73% increase in first-half pretax profits at £83.9m before goodwill, amortisation and a £12m reorganisation charge.

Sales rose 93% to £698.1m and the combined group completed 5,835 units, 68% more than in the same period of last year. Average prices rose from £103,770 to £119,645.

Mr Davidson said Beazer had now been fully integrated into Persimmon and savings of £10m were expected in the second half of the year.

The company anticipates annual savings in excess of £33m after a shake-up which has involved 560 redundancies and a further 100 posts being lost in the former Beazer business.

Part of the £12m exceptional charge will go towards the potential cost of settling 25 industrial tribunal cases involving former Beazer employees. Mr Davidson said Beazer had been "vastly overstaffed" but insisted everyone who left had been fairly treated.

There has also been a shake-up at the upmarket Charles Church subsidiary acquired with Beazer. Persimmon said it wanted to roll out the Church brand nationwide. Persimmon is also keen to expand its after-sales services such as a tie-up with Laura Ashley to provide interior design and furnishing.

Despite George Wimpey's acquisition of McAlpine's housebuilding business earlier this month, Persimmon believes there could be further consolidation. Shares closed up 11.5p at 395.5p

• Mortgage lending reached a record £10.98bn in July, up from £10.35bn, the British Bankers' Association said yesterday. The BBA said the figure was boosted by first-time buyers getting on to the property ladder and home-owners re-mortgaging to take advantage of low repayment rates.