The UK housing market has cooled in recent months, hit by a spike in mortgage rates and lower loan availability. Concerns about more interest rate hikes and the impact of red-hot inflation on households have added to the pressure.
Last month, UK housing prices slid the most since the 2008 global financial crisis, while the number of mortgages approved in November fell to the lowest since mid-2020.
The FTSE 100 firm said market conditions worsened in the fourth quarter, with weekly private net sales more than halving year on year to 0.30 units per outlet, and dropping to 0.19 in the last seven weeks.
The company gave limited detail on its 2023 outlook, adding it was too early to predict a recovery in demand.
Despite the clouds hanging over the sector, Persimmon said it built 14,868 homes in 2022, towards the top end of its target, and saw a 5% rise in private average selling prices.
Its shares climbed as much as 7.6% to a more than three-month high of 1,394.5 pence, boosting FTSE 100 peers Barratt and Taylor Wimpey too.
JP Morgan analysts in a note described the 2022 trading update as "mixed", but said Persimmon had delivered better than expected top-line and net cash positions, while fourth-quarter booking levels came in line with bigger rival Barratt.
Persimmon said current forward sales - deals signed between buyers and builders with a future date - stood at 1 billion pounds ($1.2 billion), down from 1.6 billion a year earlier.
Barratt on Wednesday said it would build fewer homes this year than last, while its order book was down about a third in roughly the last four months of the year.
($1 = 0.8235 pounds)
(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Jason Neely and Mark Potter)
By Aby Jose Koilparambil
