Housebuilder Persimmon has shared its half year results, revealing an operating profit fall of 65% in H1 2023.
The housebuilder recorded 4,249 new home completions during the period, down from 6,652 in the half year prior.
However, Persimmon’s profit guidance for the year remained unchanged.
Charlie Huggins, manager of the ‘quality shares portfolio’ at Wealth Club, said: “Lower home completions combined with elevated build cost inflation have seen Persimmon’s first half profit fall significantly.
“New home buyers are clearly exercising greater caution, and frankly who can blame them. This has presented a very challenging backdrop for Persimmon and its peers.”
He added: “Mortgage rates have soared over the past year, and have increased further in recent months.
“When combined with the limited availability of high loan-to-value mortgages and the end of the Help to Buy scheme in England, it’s no surprise the housing market has seen a marked slowdown.
“Persimmon has responded by battening down the hatches, significantly reducing land approvals and placing restrictions on hiring and new site openings.
“They are operating in ‘wait and see’ mode, until the outlook for the housing market becomes clearer.”
Huggins concluded: “The outlook for Persimmon is murky at best. House prices have held up better than expected so far, but cracks are starting to appear.
“And while interest rates should be close to peaking, this offers little succour for first-time buyers.
“Until there is greater clarity on the future path of interest rates it seems unlikely the pressure on the housing market will ease any time soon.”
