(Reuters) -Persimmon, Britain’s No. 2 homebuilder, and its smaller rival Vistry Group Plc highlighted strong housing demand to back their outlook on Tuesday, despite flagging persistent supply chain pressures.
Cheap loans have supported the undersupplied British housing sector after a tax holiday introduced to prop up the market expired in September, while a surprise central bank decision last week to hold rates also boosted homebuilder stocks.
Persimmon reiterated it expected annual sales of new homes completed to be about 10% more than the previous year, while Vistry said it was on track to deliver its annual earnings target of about 345 million pounds, more than double the profit earned in 2020.
Persimmon said it expected building costs to rise about 5% this year due to supply chain snags, while Vistry warned that the constraints were delaying its construction in addition to causing price increases on certain products.
“We expect construction output in the first half of 2022 to be similar to that achieved in the first half of 2021,” Vistry said, adding it expected building cost inflation to run at about 4-5% for the next 12 months.
Supply chain problems that are dragging on the UK economy’s post-lockdown recovery will persist for at least a year, according to a survey of finance chiefs at top British companies published last month.
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(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Subhranshu Sahu)