Is an average Persimmon home really “very affordable”?

The leading housebuilder Persimmon has built housing in Sidmouth:

Futures Forum: Persimmon, Sidmouth and "promoting well-designed housing that is sustainable and provides much-needed new housing..."

It owns a fair amount of land in the surrounding AONB of the Valley and would like to build on that too:

Futures Forum: Persimmon, Sidmouth and greenfield sites

The question is what type of housing has been built - and what housing needs to be built:

Futures Forum: Housing crisis in Sidmouth - what housing crisis? ... "Evidence for a housing shortage is hard to come by."

Looking at Persimmon's trading statement at the beginning of the year, the Independent asked the question:

Persimmon says its homes are very affordable. Does that stack up?

Putting the details of an average family into NatWest’s mortgage calculator suggests otherwise

James Moore Thursday 5 January 2017

“Buying a new-build home remains a compelling choice supported by competitive mortgage offers which continue to make a new home purchase very affordable.”

So said Persimmon Homes, on the back of its latest trading statement. An update that made the company the belle of the stock market ball. Revenues for 2016 were 8 per cent higher than in 2015 and the group completed 559 extra sales. Happy days for its investors.

But let’s take a closer look at that quote. Is an average Persimmon home really “very affordable”?

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Persimmon says its homes are very affordable. Does that stack up? | The Independent

At the beginning of 2014, similar questions were being asked:

The affordable housing that's unaffordable

Face the Facts

John Waite investigates why some new housing developments have been given planning permission without any affordable housing.

Councils set a target for what percentage of new build homes in their area should be affordable to people on lower incomes and will only grant planning permission for a scheme on condition that the developers include a proportion of low-cost homes. But following a change in the law in April 2013, some of Britain's biggest house-builders have told councils that they are no longer able to meet their obligation because it unfairly cuts their profit margins.

Face the Facts hears the allegation that some councils have been presented with out-of-date calculations that make a housing development appear less profitable than it actually is.

BBC Radio 4 - Face the Facts, The affordable housing that's unaffordable

The East Devon Watch blog has been asking these sorts of questions for some time now:

If Persimmon tells you they can’t afford affordable housing … | East Devon Watch

Now the company has just posted very nice earnings - with another observation from EDW:

One of those “too poor to build affordables” posts 30% profit rise | East Devon Watch

With the same story at the Daily Mail:

UK builder Persimmon posts 30 pct first-half profit rise

By REUTERS

PUBLISHED: 22 August 2017

LONDON, Aug 22 (Reuters) - Britain's second biggest housebuilder Persimmon said its first-half pre-tax profits rose 30 percent to 457 million pounds but it would remain cautious over land buying due to uncertainty around Brexit.

Persimmon, which built just over 15,100 homes across the country in 2016, said its volumes rose 8 percent to 7,794 units in the first six months of the year and that customer interest in its developments remained strong.

The firm said the housing market was still "confident" and its reservation rate had risen 2 percent in recent weeks but it would be prudent about buying land for future building, the biggest cost faced by most builders.

"We will remain cautious with respect to new land investment for as long as the uncertainties facing the market persist, particularly those associated with the risks to the UK economy resulting from the UK's exit from the EU," the firm said on Tuesday. 

UK builder Persimmon posts 30 pct first-half profit rise | Daily Mail Online

Persimmon posts 30 percent first-half profit rise - Reuters

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