UK housebuilder Persimmon reveals a 30% drop in the value of its forward sales and a 42% fall in new home completions in its trading statement for the first quarter of 2023.

In its trading update the house building group shows that sales secured on homes fell to 1,136 at the start of this year compared to 1,950 homes in the first quarter of last year.

In what it described as a ‘challenging market’ the company reports that its cash position at the end of March fell by 18% to £353m down from £433m in Q1 2022.

Despite this, Persimmon insists its pricing has remained “firm” in the first quarter as the selling price on private homes rose 10% on the same period last year.

Persimmon group chief executive Dean Finch believes the performance in the first quarter was as expected and reflects the challenging trading conditions in Q4 2022 and consequent lower forward order book as Persimmon entered the year.

“Trading over recent weeks has offered some signs of encouragement with visitor numbers up, cancellation levels normalising and sales rates continuing the steady improvement evident since the start of the year.

He adds: “If sales rates continue at the levels seen year to date, we would expect full year 2023 volumes to be toward the top end of the previously indicated range of 8,000 to 9,000 completions. Sales prices remained firm in the period as customers recognised the quality, improved value and energy efficiency of our homes, with a good response to our marketing campaigns driving strong customer interest.

Looking beyond 2023, Finch maintains that Persimmon has a strong platform from which to grow outlets and volumes as the market recovers.

“We have an excellent pipeline of new land opportunities to support growth in 2024, subject to planning, and we are encouraged by the early signs of improved customer confidence. The longer-term demand fundamentals for new homes remain robust.”

Persimmon’s share price rose in early morning trading.