Persimmon announces £780m loss for 2008 amid housing downturn

Developer Persimmon has followed its rivals by reporting a loss for the 2008 year after having to write down the value of its land bank

The housebuilder made a pre-tax loss of £780 million last year, compared with a profit of £583 million the previous year, however the company has insisted it is financially sound.

The company also said it will not be paying a dividend in 2009 after chief executive, Mike Farley, warned that like 2008, this year would be “another challenging year”.

Meanwhile, house sales plummeted 36% to 10,202 and average selling prices fell by more than £16,500 to £172,994.

Just last week, Redrow and Barratt Developments announced heavy losses for the second half of last year - also due to the housing market downturn.

Redrow reported a pre-tax loss of £46.2 million, down from a £35.8 million the previous year, while Barratt announced a pre-tax loss of £592.4 million, compared with a profit of £192.4 million the previous year.

The housing market downturn has led many housebuilders to reduce their workforce with Persimmon being no exception after shedding around 2,000 jobs in 2008.

Falling house prices and lower interest rates is leading to an influx of enquiries from potential buyers but rising unemployment means recovery in the market is a long way off, according to Farley.

Story link: Persimmon announces £780m loss for 2008 amid housing downturn