SHARE OF THE WEEK: Persimmon to shine light on UK housing market

Persimmon will shed light on how the UK housing market is holding up as interest rates rise.

The blue-chip homebuilder will brief investors Wednesday on its performance in 2022 and how sales have fared so far this year.

Rising interest rates have pushed up the cost of borrowing for millions of homeowners and homebuyers.

The housing market suffered a further slowdown after Liz Truss and Kwasi Kwarteng’s mini-budget last September sent mortgage rates skyrocketing.

Mortgage rates reached their highest level since the 2008 financial crisis, but have since fallen.

And the UK’s largest homebuilder, Barratt Developments, said this month there were “encouraging” signs of a turnaround from the turmoil.

Shareholders of Persimmon will hope it sees a turnaround of its own, with shares down 40 percent over the past year.

In addition to the mini budget, Persimmon is struggling with sky-high energy, material and personnel costs.

Signs of a recovery in demand and a strong outlook for the year will provide much-needed peace of mind for the homebuilder’s shareholders.

But analyst Aarin Chiekrie of Hargreaves Lansdown said: ‘There are fears that the current fall in house prices could be the start of a larger correction.

“If that appears to be the case next week, there could be a negative market reaction, despite many concerns already being priced in.”