In a trading update for the year ending December 31 2022, the firm said that the changed market conditions gathered pace in the final months of the period, resulting in private net sales in Q4 slipping to 0.30 per outlet per week, compared to Q4 2021’s 0.77. The rate weakened further in the last seven weeks of the year to 0.19 per outlet per week.
Persimmon’s southern regions saw the greatest impact in sales falls. Persimmon stated: “We saw a particularly sharp fall in demand on those sites where Help to Buy was more widely used once the scheme in England closed for new applications from 31 October."
End-of-year forward sales position for the firm has now lowered to £1 billion against 2021’s £1.6 billion. The reduction in Q4 sales would have an adverse impact on 2023’s outlook, it stated.
Persimmon said it was focused on achieving “quality returns” rather than volume. During 2022 its new home completions still increased, rising 2% to 14,868 which it said was towards the top end of guidance. Its private average selling price improved by 5% to £272,200.
Dean Finch, Persimmon’s group CEO, commented: "Persimmon has delivered a strong performance for 2022 which has been achieved despite headwinds from supply constraints in the early part of the year and a more challenging sales environment in the second half.
"In the second half of the year, rising interest and mortgage rates, inflation and weaker consumer confidence began to impact customer behaviour across the housing market. However, with high-quality land holdings, a strong balance sheet and an experienced management team, Persimmon is well placed to navigate this challenging short-term backdrop, whilst continuing to take advantage of any opportunities that may arise.”
