Persimmon PLC (LSE:PSN) warned that higher mortgage rates, inflation, heightened market uncertainty and the end of Help to Buy in England had hit sales in the fourth quarter and will have an “adverse impact on the outlook for 2023”.
“It is too early to predict when there will be a recovery in demand,” the housebuilder said.
In line with the broader market, Persimmon said “we saw notably weaker customer demand in the second half of the year” with the change in market conditions gathering pace in the final months of the period.
Overall, 2022 private net sales were 0.69 per outlet per week for the year (2021: 0.83) but this fell to 0.30 per outlet per week in quarter four (Q4 2021: 0.77), and 0.19 per outlet in the last seven weeks of 2022 (2021: 0.61).
The trading performance weakened across all geographies with the biggest impact on sales seen in the south.
There was 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 2022, Persimmon said.
New home completions of 14,868 for the year were towards the top end of previous guidance and up 2% on 2021, while average selling prices showed annual growth of 5%, up to £248,600.
The group also said it ended the year with a strong and well capitalised balance sheet with around £860mln of cash and £475mln of land creditors.
Dean Finch, group chief executive, commented: “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.”