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Housebuilder Persimmon has reported a slight profit rise of one per cent in a "challenging" year and said it remained cautious in the short term.

Persimmon recorded pre-tax profits of £585.1 million for the year and increased its full-year dividend by ten per cent to 51.2p.

The average selling price for its houses went up by one per cent to £189,558 with underlying growth of three per cent.

Group chairman John White said: "Persimmon has once again delivered an excellent result during what has been a very challenging year.

"When confidence returns and sentiment improves we anticipate a return to a stronger market; in the meantime we remain cautious.

"However, with an experienced management team, strong balance sheet and excellent landbank we remain confident for the future."

Turnover for the year was £3.015 billion, down four per cent on the previous year.

The company's order book has also suffered, with reservations down from the beginning of the year, although visitor levels have been improving.

Persimmon said this was due to a 'wait and see' approach taken by customers who were reacting to market conditions.

But the negative customer reaction to the credit squeeze during the autumn now appeared to be easing a little following recent interest rate reductions, the housebuilder added, and cancellation rates had improved since the autumn.