Persimmon hit as prices fall further

Housebuilder Persimmon today announced a further £600 million write down on its landholdings as it reported more house price falls in the stricken property market.

The Charles Church builder said house prices had fallen further since the end of its half-year, with cancellation rates on house reservations also soaring to around 35 per cent in recent weeks.

Related articles

• Higher borrowing is 'responsible', insists PM
• FTSE steadies after global shares slip
• Darling set to scrap 'golden rule'
• Japan's Nikkei stock index falls to 26-year low
• Further global rate cut likely, hints PM
• Darling under pressure to avert meltdown of sterling
• IMF offers to bail out Ukraine with $16.5bn loan
• Shares continue to slide
• Stephen King: Sometimes the economic beauty contest gets us into an ugly mess
• Claire Fox: Not, please, in Marx's name...

Persimmon brought forward its third quarter interim management statement from November 18 after trading conditions worsened following the financial markets crisis.

The York-based firm said it now anticipates a fall of around 10 per cent in selling prices for the second half of the year - double previous estimates.

Persimmon said in its half-year results that prices had weakened around 5 per cent and the group wrote off £40 million from its land bank.

Its shares were down 8 per cent at one stage in early trade today after news of the write-down.

The group said: "Since we reported out half year results on August 21 2008 we have encountered deteriorating trading conditions.

"The uncertainty created on the housing market by the increasingly turbulent and uncertain outlook in financial markets has had a negative impact on all our regions across the UK."

Sales revenues for this year, including legal completions to date, stand at around £1.8 billion, with a further £250 million of sales already taken for 2009, according to the firm.

Persimmon said it was "fully supportive" of the Government's initiatives to increase mortgage availability to 2007 levels, adding: "Until this begins to take effect we do not expect to see any improvement in trading conditions and we continue to carefully monitor all our activities."

The company expects to complete around 10,000 homes for the year ending December 31.

It said it continues to control costs tightly and remained focused on increasing social housing sales volumes by around 25 per cent this year.