Shares in one of the UK’s biggest builders dropped sharply as it announced plans to halve the number of new homes it puts on the market this year.

Persimmon also issued a profit warning and cut its dividend by 75 per cent as its chairman Roger Devlin said that, according to that many, “2022 was perhaps the most difficult year they have known in the building trade”.

Profit before tax was £731 million in 2022, down from £967m the year before. Revenue rose from £3.6 billion to £3.8bn.

The company sold 14,868 homes, around 300 more than in 2021, at a price of £248,616 on average, up around 4.9%.

One analyst pointed to a “rough year” ahead for the housing market as the company posted its results for the year ending December 31, 2022.


READ MORE: Persimmon reveals fall in demand amid market 'nervousness'


Persimmon, which has sites across Scotland, said that it would build and sell between 8,000 and 9,000 homes in 2023, down from close to 15,000 the year before, which was an all-time high for the business.

The company’s decision comes in a changing market where house prices are starting to fall as potential buyers are dealing with the soaring cost-of-living and spiking interest rates which make it more expensive for them to borrow money.

New figures from Nationwide on Wednesday suggested that house prices dropped by their fastest annual rate since 2012 in the year to February.

This year will be “difficult”, Persimmon said, as it announced the plans. The rate at which it sold a home slowed to a trickle in the last three months of 2022, but has recovered somewhat since the new year began.


READ MORE: Housebuilder gets green light for 1,000 homes


Dean Finch, chief executive, said: “The market remains uncertain. Our marketing campaign has helped improve the group’s sales rates in the new year from the lows at the end of 2022, but they still remain lower year on year.

“We have carefully managed our pricing, recognising the improved value and energy efficiency of our product in these difficult times and sales prices have proved resilient."

He added: "The sales rates seen over the last five months mean completions will be down markedly this year and as a consequence, so will margin and profits."

Julie Palmer, partner at Begbies Traynor, said that the shockwaves caused by the mini-Budget and its longer-term impact on the housing market “are clear to see in Persimmon’s numbers”.


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She said: “Overall, 2022 was a bumper year for the housebuilder, despite huge uncertainty in the final three months caused by soaring mortgage rates as the impact of the Government’s economic policies sent markets reeling.

“This year has started off on shaky foundations. The cost-of-living crisis rumbles on making buyers wary, and inflation is raging, meaning the bricks and tiles Persimmon uses to build homes are getting ever more expensive despite the company’s vertically integrated model which keeps its costs down.

“It’s going to be a rough year in the housebuilding world but Persimmon is better placed than many. The UK continues to face a systemic property shortage and people will always need homes.

“There are likely to be casualties across the industry but Persimmon’s sheer size and strong balance sheet mean it has sound foundations to withstand what’s likely to be a tough time.”

Shares in Persimmon closed down 175p, or 12.05%, at 1,277.5p.