Persimmon Targets Increased Home Completions This Year Despite Iran Conflict Concerns
Housebuilding giant Persimmon is aiming for a rise in new home completions during 2026, provided the ongoing conflict in Iran and its broader impacts prove to be short-lived. The York-based developer issued its full-year results to the London Stock Exchange, revealing a significant 12% increase in completions for 2025, reaching a total of 11,905 homes.
Underlying operating profit also saw a robust 17% growth to £472.1 million, although this figure was calculated before accounting for an exceptional charge of nearly £45 million and a goodwill impairment of £3.4 million. The company's performance reflects a resilient market environment, with current conditions described as "supportive" by executives.
Strong Market Conditions and Operational Expansion
Persimmon's leadership highlighted several positive factors contributing to the favorable outlook, including improved mortgage availability, real wage growth, and beneficial changes to planning regulations. In the first nine weeks of 2026, the net private sales rate per outlet surged by 9% compared to the same period last year, indicating sustained demand.
The average selling price in 2025 rose by 4% to over £278,000, further underscoring the strength of the housing market. To meet this growing demand, Persimmon is ramping up its production capabilities. Staff at the firm's brick factory in Doncaster, South Yorkshire, are working 24/7, with plans to expand the site's capacity by adding a new production line scheduled to open in 2027.
Alongside bricks, the company now prefers to use in-house manufactured materials such as timber frames and tiles, enhancing its vertically integrated model. This strategic approach allows Persimmon to control costs and streamline operations, positioning it well for future growth.
Uncertainty from Middle East Conflict
Despite the optimistic indicators, Persimmon has issued a cautionary note regarding the conflict in Iran. The company stated that the impacts on customer sentiment remain unknown and could potentially affect sales and market stability. Group Chief Executive Dean Finch emphasized this point in his statement, acknowledging the uncertainty while expressing confidence in the firm's resilience.
Finch said, "Persimmon delivered a strong performance for 2025, with completions growing 12% and underlying profit before tax increasing 13%. This reflects our sustained investment in the business and our commitment to self-help, enabling us to grow in a challenging market." He added, "Sales in the opening weeks of the year have been strong, and the build-to-rent market is recovering from the slowdown around November's Budget."
However, he cautioned, "Whilst we have good visibility of both our costs for 2026 and our demand from registered providers and build-to-rent, the impact of the Iran conflict on customer sentiment remains to be seen. Assuming the conflict with Iran and its impact is short, Persimmon is set to grow again in 2026."
Strategic Positioning for Medium-Term Growth
Persimmon's growth strategy is bolstered by its three distinctive brands, which all expanded last year, diversifying its market reach. The company's strengthened brands, strategic land bank, ongoing investments, and operational improvements are supported by a robust balance sheet and its unique vertically integrated model.
Finch concluded, "Our strengthened brands, strategic land bank, on-going investment and operational improvements, supported by our balance sheet and unique vertically integrated model, position Persimmon well to grow into the medium term." This comprehensive approach aims to navigate the uncertainties posed by geopolitical events while capitalizing on favorable domestic market conditions.
