The Persimmon share price is likely to rise on the back of the news that the company declared a second interim dividend of 70p which will be paid in mid-December. The Taylor Wimpey share price also surged, with the property market in rude health

The Persimmon group paid an earlier interim dividend of 40p in September. The third quarter update was short and sweet; trading throughout the summer was resilient, as was demand. Obviously construction work was impacted by the lockdown earlier in the year, but forward sales stand at £1.36bn, which is a 43% rise on the year. In terms of liquidity, Persimmon is in a very strong position as the level is £960m, up from £371m last year. Not that long ago, Rightmove described the level of activity as a ‘mini boom’. Persimmon are in a good position to cash in on the buoyant market.

Persimmon share price boosted after sell-off

The first-half figures were released almost three months ago, and the housebuilder declared an interim dividend of 40p. Keep in mind the full-year payout last year was 125p. When comparing the two, the interim payment seems relatively small but it is of large significance because it projects an image of confidence. In the six-month period, the number of house completions dropped by 35%, which is hardly surprising given the lockdown, but forward sales jumped by 20%.          

Just before the pandemic took hold, the Persimmon share price set a record high, but then it dropped by almost 60% during the subsequent sell-off. When the company posted its first-half numbers in August, the stock hit a five-month high. The Persimmon share price has been driving higher for over a week now, and if the bullish trend continues it should target the 3,000p area. A pullback could encounter support at the 200-day moving average at 2,447p.

Taylor Wimpey share price also surges

The Taylor Wimpey share price surged yesterday on the back of its bullish trading statement, released two days earlier than expected. The company announced that it expects full-year operating profit for 2021 to be at the upper end of market expectations. In addition to that, it stated that completions for 2021 should be between 85% and 90% of the 2019 level. The company expects to invest significantly in land over the next 12 months. In February, the Taylor Wimpey share price hit its highest level since 2007, but when the health crisis kicked in, it sold off aggressively. Even though it has been pushing higher lately, it would still need to rally over 60% from its current levels to retest the highs of February.