Persimmon home sales up nearly 40% on 2013

The country's second largest homebuilder Persimmon has reported a good start to the year, in a further sign that the housing market is picking up speed.

York-based Persimmon said it has sold 7,200 homes for 2014, a 38% advance on last year. The average selling price has risen by 3% to £200,400. Visitor levels are up 10%, while cancellations on purchases are at historic lows.

It has also been a winner from Help to Buy, accruing 5,000 home sales in the first year of the government-backed mortgage subsidy scheme. In their trading statement Persimmon welcomed a recent decision to extend the scheme by four years to the end of the decade.

Persimmon shares were up almost 2% to £12.90. The results are likely to win approval from shareholders gathering at York racecourse later on Wednesday for the company's annual general meeting, where they will vote on whether to return £213m to investors.

These buoyant results come one day after official statistics revealed that house prices in the UK had risen by 9.1% in the year to February 2014, and by 17.7% in London. The average house price is now £253,000, or £196,000 excluding London and the south east. The data prompted warnings from the free-market thinktank the Adam Smith Institute and campaign group Shelter that the housing market, especially in London, is "out of control". But the government insists that mortgage lending remains below the historic average.

The demand-supply imbalance in the capital was underlined by Telford Homes, a smaller developer focused on London, which expects its profits to double this year. The company, which describes itself as operating in "relatively affordable areas of inner London", reported strong advances sales well into 2017. It has already sold 98% of homes on its advance sales list for the year ending March 2015, over 70% for 2016 and 25% for 2017.

"The London property market has remained buoyant, with demand from those wanting to live in London remaining well in excess of the supply of new homes," it said.