Persimmon and Bovis feel the pain as sales plummet

Housebuilder Persimmon has reported that it completed the sale of 10,202 units in 2008, down from 15,905 in 2007.

The developer described the short-term outlook for the UK housing market as challenging and expects to record a 42% fall in revenues in 2008, compared with the previous year.

Last year, the average selling price of a Persimmon home fell just over 9% to £172,000.

The decline compares with a 15.9% annual fall in the average price of a home as recorded by Nationwide’s December house price index.

The group is now in the process of refinancing debt that is due for repayment in 2010 and will not be paying a final dividend as it aims to conserve liquidity until credit conditions improve.

The value of Persimmon’s forward sales amounted to around £400 million at the beginning of the year.

Meanwhile, Bovis Homes has announced that its 2008 costs could be 50% lower than a year earlier and that by the end of March, its headcount will be about 60% down on the beginning of 2008.

Bovis began 2009 with 425 reservations, about half the number on its books at the beginning of 2008.

The group described trading conditions in the housebuilding sector as the worst seen in many years.

Last year, sales plummeted 38% to 1,817 units and the average price of a Bovis home declined to £150,000, from £179,500 in 2007.

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