Housebuilder Persimmon is expecting to see a substantial drop in the number of homes it builds this year after its chief executive warned of an “uncertain” housing market.
The York-based firm said it was likely to complete between 8,000 and 9,000 homes this year, a big reduction on the nearly 15,000 it built last year. The company said that the rate at which it was selling homes had slowed dramatically in the last three months of 2022, but had recovered somewhat since the new year began.
The warning from Persimmon - which follows fellow housebuilders Bellway and Barratt also pointing to a slowdown in new buyers - comes as rising mortgage rates and tougher economic times for people wanting to buy houses.
Read more: Bellway reports record revenue but warns on housing slowdown
Chief executive Dean Finch said: “The market remains uncertain. Our marketing campaign has helped improve the group’s sales rates in the new year from the lows at the end of 2022, but they still remain lower year on year.
“We have carefully managed our pricing, recognising the improved value and energy efficiency of our product in these difficult times and sales prices have proved resilient. We responded quickly to stimulate sales, enhance cost controls and preserve cash, promptly slowing new land investment in the fourth quarter of last year.
“Nonetheless, the sales rates seen over the last five months mean completions will be down markedly this year and as a consequence, so will margin and profits. However, it is too early to provide firm guidance.”
In the release of full year results for 2022, Persimmon recorded turnover rising to £3.82bn, with a total of 14,868 new homes completed. Underlying operating profit topped £1bn and the company retained its five-star customer satisfaction rating.
The company’s average selling price for a house of £272,206 was 20% lower than the national average.
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