Persimmon wary as UK housing market struggles

 
Marion Dakers
HOUSEBUILDER Persimmon warned yesterday that the housing market remained flat throughout autumn, with a lack of available mortgages and mounting consumer worries stunting sales.

Persimmon, which posted a 27 per cent jump in annual revenue in August, said it has reached sales targets for the year and has homes worth £460m reserved for 2011. However, reservations are eight per cent below the same time last year, and the company said the expected spring rush will be a crucial indicator for the state of the market.

The company admitted it had not experienced a boom in autumn, a traditionally busy time as potential buyers return from summer breaks. “Mortgage availability remains a major obstacle for customers,” the firm said in a trading update.

Persimmon added it expected to complete 9,400 homes this year, a five per cent rise on last year.

The business added its sales are expected to rise 10 per cent this year. The firm said its core margins are expected to double in 2010 to eight per cent. It will reduce its borrowings to less than £80m by the end of the year, which is £20m ahead of its previous guidance.

Shares closed down 0.8 per cent up at 357p yesterday.