The boss of housebuilding giant Persimmon has warned that supply chain disruption, labour shortages and planning delays have slowed down building.
Shares in the company, one of the UK’s biggest operators, dropped after it reported a slump in the number of new house completions over the first half of 2022.
Dean Finch, group chief executive, said: “As we rebuild our outlet position, delays in the planning system, disruption in material supply chains and challenges in securing labour have impacted completions in the period.”
Completions slid to 6,652 over the six months to the end of June, from 7,406 over the same period last year.
Meanwhile, revenues dropped by 8.2% to £1.69 billion against the same period in 2021.
The group said build costs increased due to supply constraints, higher labour costs and energy inflation.
However, it said the continued increase in house prices has offset these rises.
Persimmon said it there will be a slight fall in operating margin but said overall profits for the first half are set to be “modestly above our expectations” amid higher property prices.
It highlighted that demand across the country is still “strong” as well, reporting that average private weekly sales are up 1% against 2021 levels.
Mr Finch added: “I am pleased we have further enhanced our build quality in the period while also driving build efficiency to historical highs and increasing housing gross margin.
“We continued to complement this progress with high quality, disciplined investments in land driving growth in our outlet position.
“We have delivered this despite the significant on-going challenges being faced by the industry.”
It came as figures from Halifax on Thursday showed that average property prices rose 1.8% month-on-month in June, marking the biggest monthly rise since early 2007.
Laura Hoy, equity analyst at Hargreaves Lansdown, said: “The good news is that demand showed no signs of slowing, with the average house price continuing to climb and a strong forward sales position.
“That should be enough to prop up profits with management guiding for a slight beat at the half year.
“The market wasn’t overly impressed though, likely reflecting worries that this red-hot demand won’t last forever as the cost-of-living crisis continues to grow.”
Shares in Persimmon were down 5.8% at 1,756p in early trading.