* Persimmon forward sales at 1 bln stg in 2013
* 2012 pretax profit 225.1 mln stg vs forecast 215.8 mln
* Mortgage rates fell in first 8 weeks of 2013
By Clare Hutchison
LONDON, Feb 25 The British government's drive to
boost mortgage lending is starting to work and support the
housing market, the country's biggest housebuilder said on
With incomes squeezed by a protracted recession and
crisis-hit banks looking to rein in lending, the government has
come under pressure to help home buyers and support a housing
market seen as vital to consumer confidence.
Shares in Britain's housebuilders have risen sharply
following the introduction of government-backed schemes like the
"Funding for Lending," which offers incentives for banks to
lend, and "First Buy" for first-time purchasers.
Persimmon, Britain's biggest housebuilder by market value,
said on Monday it was now starting to feel the benefits.
"In the first 8 weeks of this year we have seen (mortgage)
rates come down by anything up to 45 basis points. If you talk
to lenders, there is a bit more of an appetite to be in the
mortgage market so it's coming through on both fronts," chief
executive Mike Farley told Reuters after Persimmon reported a
forecast-beating 52 percent rise in pretax profit for last year.
Farley said he expected to see steady progress in the
housing market as the British economy, which had its credit
rating downgraded one notch by Moody's on Friday, remained weak.
"I think it will be gradual improvement rather than large
scale improvement because of the general economy as a whole.
Nevertheless the sentiment is more positive for the year as we
start off than it has been for a while."
Last month, Bank of England figures showed loan approvals
for house purchase in Britain rose in December to their highest
level since January 2012, and net mortgage lending increased by
the biggest amount since April.
Persimmon said it had made a strong start to 2013, with
forward sales reaching 1 billion pounds ($1.5 billion).
Pretax profit for the year ended Dec. 31 was 225.1 million,
helped by sales of large family homes. Analysts had on average
expected a profit of 215.8 million pounds, according to a
Thomson Reuters I/B/E/S poll of 14.
Persimmon shares, which have surged 40 percent in the last
year, were down 0.7 percent to 902.74 pence at 1055 GMT.
The firm, which has been allocated plots of land that can be
sold under the First Buy scheme, is well-placed to take
advantage of government initiatives, said Cenkos Securities
analyst Kevin Cammack.
"On balance the initiatives should help them a little bit
more than most because they are positioned a bit more into that
market (for first time buyers) and of course they are truly
national so they can use that as marketing tool throughout
regions," he said.
Britain's big housebuilders have coped with a stagnant
property market thanks to snapping up cheap development land at
the depths of the financial crisis, selling more expensive
family homes rather than flats, and building homes in the more
affluent south, where house prices have stayed strong.
Persimmon, whose brands include Persimmon Homes, Charles
Church and Westbury Partnerships, said it completed 9,903 homes
last year, up from 9,360 in 2011, and that its average sales
price rose 6 percent to 175,640 pounds.
It added about 14,800 plots to its land bank over 2012,
taking the total to 68,200, representing 6.9 years of supply.
In February last year Persimmon announced a plan to return
1.9 billion pounds to shareholders over 9 years. The company
said it was on track to make its first dividend payment of 75
pence per share in June 2013.