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Persimmon optimistic despite sales downturn

York-based housebuilder Persimmon has said forward sales for the start of 2008 are down 14 per cent on last year because of the uncertainty in the property market.

The impact of tighter credit markets also meant the number of sale completions by the company fell 5 per cent to 15,905 in 2007.

However, it said sales prices remained resilient with the average cost of a property increasing to £189,558 from £188,129 a year earlier.

With the company also benefiting from tight cost controls, Persimmon said it was on course to meet the mid-point of City expectations for 2007 profits.

The company posted record profits of £281 million in the first half of 2007, but warned of a “challenging” market back in August and conditions have worsened since then.

However, it added today it was operating from 7 per cent more sites than in January 2007, which it said should support its sales position this spring.

In a statement Persimmon said: “It is too early in the New Year to predict exactly how the market will develop over the next few months. However, we are confident that our focus on cash management through these more challenging times will ensure that when the market improves we are well set to take advantage of it.”

Persimmon has a strong balance sheet and is often linked with more industry consolidation moves following its 2006 acquisition of Westbury.

It is under pressure to complete further deals after Barratt Developments paid £2.2 billion for Wilson Bowden and George Wimpey and Taylor Woodrow completed a £5 billion merger.