LONDON (Reuters) - British housebuilder Persimmon (LSE:PSN) has yet to gain any significant benefit from the government's mortgage guarantee scheme because of the high interest rates being charged, the company said on Wednesday.
Persimmon and its rival housebuilders have been some of the biggest beneficiaries of government efforts to help homebuyers and free up mortgage lending, primarily through the equity loan element of the Help to Buy scheme, which relates only to new-build properties.
Visitor levels to Persimmon's sites between July 1 and November 5 were 20 percent higher than a year earlier, it said. The builder says it is now fully sold for the current year, with 650 million pounds in forward sales reserved beyond 2013.
However, it added that the impact from the second part of Help to Buy, guaranteeing up to 130 billion pounds of mortgages on new and existing homes, has been muted since its October launch because of the interest rates.
Four of Britain's large lenders - RBS (LSE:RBS), Lloyds (LSE:LLOY), HSBC (LSE:HSBA) and Santander UK (MCE:SAN) - have signed up to this part of the scheme.
"We believe that mortgages associated with the Help to Buy equity loan scheme will remain the preferred choice for the majority of customers of the housebuilding industry, given that interest rates for this product are significantly more competitive than those available with the government guarantee," the company said.
Interest rates for the mortgage guarantee scheme currently stand at about 5 percent.
Persimmon, Britain's largest housebuilder by market capitalisation, said it has sold more than 3,000 homes under Help to Buy's equity loan scheme, which was launched in April.
The company also said that its underlying operating margins improved by 300 basis points in the first half of the year to 15.1 percent.
Shares in Persimmon, which have risen by more than 60 percent since the start of the year, closed at 1215 pence on Tuesday, valuing it at 5.9 billion pounds.
(Reporting by Brenda Goh; Editing by David Goodman)
- Budget, Tax & Economy
- interest rates