The Jeff Fairburn era at Persimmon didn’t properly end when the over-bonused and unabashed chief executive walked away with his ludicrous £75m windfall in 2018. For the housebuilding company itself, good times kept rolling in the form of rising house prices, gentle market conditions and a dividend policy that channelled large sums to shareholders in most years. Even the Covid-related slowdown proved only a brief interruption.
The jig is up now, though. Persimmon’s trading update on Tuesday was the first from the sector to spell out what everybody half-knew already: the market has turned. Even after a halving in the share price this year, though, Persimmon’s cracks were worse than the City had predicted. Cancellation rates have run at 28% in the last six weeks. The weekly sales rate per development scheme, which has been a steady-ish 0.75 in recent years, has plunged to 0.48.
