Persimmon sales drop 31%

21-08-2008

Persimmon sales drop 31%
Housebuilder Persimmon has confirmed it sold 31 per cent less property during the first six months of the year, when compared to the same period of 2008.

Announcing its interim results for the first half, Persimmon revealed some 5,501 homes had been sold over the period, a sharp fall from the 8,002 sold last year.

Furthermore, the average price achieved by the new-build properties also declined.

While Persimmon was able to secure an average of £189,255 per property in the first six months of 2007, this has now fallen to £181,485 – a dip of 4.2 per cent.

The loss can partially be attributed to an increase in the volume of social housing offered by Persimmon, but also to a wider slowdown in the UK property market.

The latest research from Halifax shows average property prices across the market have fallen 8.8 per cent over the last year.

This slump can partially be attributed to the mortgage market, with Persimmon arguing: "The reality is that obtaining a mortgage, which is the largest factor affecting the housing market, is equally difficult in every part of the UK at present."

Despite the slowdown, Persimmon achieved an underlying pre-tax profit of £100.9m for the first half, "delivered in very difficult market conditions". However, this is down 64 per cent from the £281.1m recorded last year.

Profits were recorded on a turnover of £998.4 million, which was a reduction of 34 per cent on the same period last year, when the company took in £1.5 billion.

The trading environment remains "the most challenging in Persimmon’s recent history", with the housebuilder announcing 1,100 office redundancies and 900 site based job losses earlier this year.

However, while expectations for the future remain muted the situation is not expected to deteriorate further.

"While at the beginning of April we experienced a significant market downturn, sales volumes since then have not deteriorated any further," added Persimmon.

"However, prices and margins remain under pressure as the industry seeks to dispose of stock housing."

Chris O'Toole

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