Persimmon shares fell 8% in early trading this morning after it announced that its landholdings would be cut by £600m and updated on further house price falls. The York-based firm said it expects a fall of around 10% in selling prices for the second half of the year – double its previous estimate. The provision for lower land values, equal to 19% of the total value of holdings, will be booked in the second half. Persimmon said in its half-year results earlier in August that prices had weakened around 5% and the group wrote off £40m from its land bank. The group said: “Since we reported out half year results on 21 August 2008 we have encountered deteriorating trading conditions. “The uncertainty created on the housing market by the increasingly turbulent and uncertain outlook in financial markets has had a negative impact on all our regions across the Cancellation rates on house reservations have risen to around 35% in recent weeks. Sales revenues for this year, including legal completions to date, stand at around £1.8bn, with a further £250m of sales already taken for 2009. Persimmon said it was “fully supportive” of the government’s initiatives to increase mortgage availability to 2007 levels: “Until this begins to take effect we do not expect to see any improvement in trading conditions and we continue to carefully monitor all our activities.” Shares were down 8% 200p at 0808 GMT.
paul.norman@egi.co.uk
