Persimmon delivers strong performance for 2022 despite weaker consumer confidence

He added: “In the second half of the year, rising interest and mortgage rates, inflation and weaker consumer confidence began to impact customer behaviour across the housing market.

“This change in market conditions gathered pace in the fourth quarter and is reflected in the reduction in our recent weekly sales rates and a lower forward sales position as we enter the new financial year.”

He added: “However, 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.”

Mr Finch said the longer-term demand for new homes remained strong.

He added: “We have made significant progress over the past two years in augmenting the group’s longstanding commercial excellence with renewed operational capabilities building a stronger, more sustainable business for the future.

“I would like to thank our colleagues, sub-contractors and suppliers for their commitment and support in 2022. Their hard work has helped ensure that Persimmon remains well positioned to serve customers across the UK who seek high quality, sustainable and energy efficient homes at a price they can afford.”

Matt Britzman, Equity Analyst at Hargreaves Lansdown, said Persimmon had followed in the footsteps of rival housebuilder Barratt, warning of a material slowdown in demand over the fourth quarter as consumers battle higher mortgage costs.

He added: “This fed through to lower sales rates, higher cancellations, and a hefty drop in forward orders. Though, it must be said, a lot of that was largely expected.

“We didn’t get any specifics on build cost inflation but we’re expecting that to have been in the region of 10 per cent over 2022.

"We’re pleased to hear Persimmons industry leadings margins have remained broadly intact. Like Barratt, higher house prices have helped take away some of the build cost pain, but as we’re seeing in the broader market, that’s a trend likely to fade away over 2023.”

Zainab Atiyyah, analyst at Third Bridge, added: “Our experts expect Persimmon’s margins to decrease over the coming 18 months as they grapple with building material inflation, labour shortages, and greater difficulty in achieving planning permission. However, they should do better than most in the industry thanks to their land strategy and timber facilities.”

“Getting enough trained staff on site is getting harder thanks to an exodus of foreign workers and a lack of interest in the construction industry from the younger generation.”