Persimmon sees output dependent on mortgage market

The York-based firm, Britain's second-largest housebuilder by market value, said sales volumes remained stable in the period from July 1 to November 15 and it expected legal completions for the year ending December 31 to rise 5 per cent to approximately 9,400 homes.

But the group said the usual autumn pick-up in visitor levels and reservations had failed to materialise and warned a constricted mortgage market was hampering housing transactions and would weigh on any industry recovery.

British house prices fell last month at their fastest pace in 18 months and surveyors expect transaction activity to remain flat for the foreseeable future, as a lack of mortgage finance and an uncertain economic outlook deters buyers.

The group said it expected to improve underlying operating margin for the full year to approximately 8 pe rcent, while it anticipated net debt to be lower than 80m ($128.9 million), better than its previous guidance.

The housebuilder said it expects to have approximately 360 active sales sites into the new year and its outlook for sales and volumes in 2011 depended on the spring selling season.