Persimmon Plc has said that the last three weeks have seen a further deterioration of the housing market in the UK thanks to the unprecedented tightening in the mortgage market.
As a result the housebuilder said that it had seen a drop in sales volume and a rise in cancellation rates in the last three weeks.
The company said that concerns about the global credit crisis had continued to undermine consumer confidence.
In response Persimmon said it would be doing more marketing and would start offering more discounts and incentives to compete for the reduced demand in the housing market, although the company admitted this would have a negative effect on its margins.
Persimmon said that its total sales revenue for 2008 had dropped 24 per cent compared to last year, down to around £1.37 billion. Sales volume was also down 18 per cent, because of an increase in partnership homes being built.
Persimmon said of its future, At some stage, in our view, housing market activity will improve given the underlying requirement for more housing and a place to live in the UK. Given our strong financial position and scale we remain confident in the medium and long term prospects for Persimmon.