The number of new homes built by London-listed Persimmon slumped by more than 40pc in the first three months of 2023, following a slip in demand amid soaring mortgage rates.
Persimmon built 1,136 new homes in the first quarter of the year, compared to 1,950 the same period a year earlier.
Chief executive Dean Finch blamed “challenging” conditions at the end of last year, which led to “lower forward order book as we entered the year”. Sales sank by 47pc to £1bn.
Mortgage rates surged at the end of 2022 in the aftermath of Liz Truss’s mini-Budget. While rates have since declined from their peak, they remain higher than they were last summer.
Mr Finch, said: “While interest remains good for all our homes, sales to first time buyers remain more challenging, reflecting stretched affordability and reduced mortgage availability at higher loan-to values, particularly in regions with higher house prices.”
The company said the outlook for the market “remains uncertain” but said sales and viewings had begun to pick-up in the last few weeks.
Persimmon said it was “encouraged by the level of visitors to [its] sites and the normalisation of cancellation rates, which resulted in a steady improvement in sales rates across the period which has continued in early April.”
Earlier this week the company announced it had invested in modular housing company Tophat. Modular construction refers to homes built from factory-made parts, such as walls, doors and windows, that are then assembled on site.
The Ikea flatpack-style of building should theoretically speed up development and save money.
