The numbers were plainly stronger. Persimmon built 11,905 homes in 2025, up 12% from 10,664. New-housing revenue rose 16% to £3.31bn, while underlying operating profit climbed 17% to £472.1m. Underlying operating margin nudged up to 14.3% from 14.1%, and underlying profit before tax rose 13% to £445.6m. Shares rose 8.3% this morning.
That is a respectable recovery, but not a return to the golden days of cheap money and frantic demand. Persimmon remains a cyclical business in a cyclical industry. British housebuilders have always swung with mortgage rates, planning rules and consumer nerves. The company itself still lists both UK economic conditions and government policy as "very high" risks.
There is, though, a reason Persimmon may be recovering faster than some peers. Its homes sit at the more affordable end of the new-build market. The company says the private selling price of its core Persimmon brand was around 19% below the market average. In a country where affordability is the main problem, that matters.
Growth with baggage
The more interesting part of the report is the tone on 2026. In the first nine weeks of the year, private sales ran at 0.73 homes per outlet per week, up 9% from a year earlier. Private forward sales stood at £1.25bn on March 1st, up 9%, and total forward sales rose 6% to £1.80bn. Persimmon expects 12,000-12,500 completions this year, with operating profit toward the top end of current consensus.
But management is careful, and rightly so. Dean Finch, the chief executive, says that the impact of the Iran conflict on customer sentiment "remains to be seen." That is a good line because it captures the real issue: this business still depends on confidence. Persimmon says build-cost inflation is stable, yet it also warns that uncertainty could affect interest rates, demand and costs.
There is another burden from the past. Building-safety charges remain large. The company added £39.8m to its provision in 2025, used £56.1m during the year and ended with £226m still provisioned. Around £83.2m is expected to be spent within 12 months.
That helps explain why the balance sheet looks less cosy than the profit line suggests. Cash fell to £117m from £258.6m, while land creditors rose to £623.4m from £423.2m. Persimmon has expanded its bank facilities to £1bn to keep funding growth.
Fairly priced, perhaps
Persimmon trades on roughly 13.3 times its underlying earnings of 100.7p. Return on capital employed was 11.7%, still well below the firm's medium-term goal of 20%.
So the market's upbeat reaction makes sense. Persimmon is selling more homes, opening more outlets and buying more land. But this is still British housebuilding: a trade where optimism can turn quickly.
