Persimmon halts new developments as sales plummet

Britain’s largest housebuilder, Persimmon, is calling a halt to all planned developments until mortgage conditions have improved.

The company has reported a sharp decline in sales over the past three weeks, despite April traditionally being the busiest time of the year for housebuilders, and has recorded a 24% decline in sales since the beginning of this year.

Total revenue for 2008 totals £1.37 billion, compared with approximately £1.8 billion in the same period of last year.

Last week, the British Bankers’ Association said that during March 35,417 mortgages were approved for house purchases, a 46.2% drop on March 2007.

As the credit crisis continues, banks and building societies have increased rates, demanded larger deposits and withdrawn their most attractive deals, on almost a daily basis.

Persimmon has around 500 sites under construction and had been planning to start work on 30 further sites this month.

Speaking to shareholders at the company’s annual general meeting, chief executive Mike Farley warned that the credit crisis will throw the Government’s targets for new house building into disarray.

He suggested that the industry could only complete 110,000 homes this year (compared with 165,000 last year), falling well behind the Government’s target of 240,000.

Mr Farley also called on the Government to amend stamp duty thresholds and scrap the tax for first-time buyers making purchases of under £250,000.

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