Page last updated at 10:08 GMT, Friday, 25 April 2008 11:08 UK

New builds stopped as sales fall

Housing development built by Persimmon
Persimmon said cancellation rates had increased in recent weeks

A leading house builder has abandoned plans to build homes on new sites until mortgage conditions improve.

North Yorkshire-based Persimmon said the lack of cheap mortgages and a fall in consumer confidence had resulted in a loss of business.

The firm said housing market activity had "deteriorated" significantly and sales had fallen by 24% from 1 January.

Work on about 30 new sites nationally - including some in the Yorkshire region - has now been postponed.

The company, based in York, has about 500 sites operating nationwide, with about 20 in West Yorkshire and others in the Humber and South Yorkshire areas.

Because of the uncertainties in the global economy and the UK lending environment, it is difficult to predict when the market will improve
Persimmon statement

Work will continue on these developments but Persimmon said building would not start on future scheduled sites until further notice.

A spokesman on behalf of Persimmon said the decision was unlikely to result in job losses.

In its annual general meeting statement, Persimmon said: "Because of the uncertainties of the global economy and the UK lending environment it is difficult to predict when the market will improve...

"Against the current backdrop we have postponed the commencement of scheduled new sites until the mortgage market improves."

The housebuilder reported that total sales revenue for 2008 was 1.37bn, compared with about 1.8bn last year.

In its statement, Persimmon said it believed the Government should raise the stamp duty threshold, which starts at 125,000, and cut interest rates to help market conditions.

The firm said it was "difficult" to say when things would improve and more support was needed for first-time buyers.

But it added that the picture would improve "at some stage" given the underlying demand for more housing in the UK.

House builder 'cautious' on 2008
26 Feb 08 |  Business
Barratt upbeat on housing outlook
27 Feb 08 |  Business
Persimmon upbeat but sales slide
09 Jan 08 |  Business

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