Persimmon sees pick-up in visitors but property market is still 'challenging'

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The Independent Online

Persimmon, the UK's largest housebuilder, is seeing the first tentative signs of a pick-up in the housing market, just in time for the spring period when it would expect to do most business.

However, while the company said that it had noticed a pick-up in the number of visitors to its sites since the beginning of the year, the process of turning this interest into actual sales remained "challenging".

Persimmon reported pre-tax profits of £585.1m for 2007 yesterday, up slightly from £582.1m in the previous year, but sales in the second half of the year slowed as the effects of the credit crunch began to take their toll on borrowers and lenders.

Mike Farley, chief executive, said: "We see a cautious start to the year – things have improved, but it will take some time to catch up as we work through this slow start to the year."

Persimmon has been able to maintain the average selling price of its homes as around £190,000, though the company warned that it had suffered from a 19 per cent fall in forward sales. Mr Farley said Persimmon had last autumn been hit by a sharp increase in the number of buyers pulling out of deals, but that cancellations were now slowing.

Mark Hughes, an analyst at Panmure Gordon, said it was too early to tell whether the sector was beginning to turn the corner. "After an absolute horror of an autumn, there are moderate signs of improvement," he said. "However, for a lot of housebuilders, it will be too late to turn the year around and grow profits."