Persimmon calls a halt to new building sites

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It has postponed starting on new building sites until the mortgage market improves.

Persimmon cautioned in late February over difficulties in getting customers to buy new homes amid concerns about the future direction of prices. But today it said conditions had got far worse as most mortgage companies had either withdrawn their most competitive mortgage rates or stopped accepting new business.

Total sales revenue for 2008 is currently down 24% on a year ago, Persimmon warned.

"Over the last three weeks the unprecedented tightening in the mortgage market has caused a further deterioration of the housing market, leading to lower sales volumes and increased cancellation rates," the company warned.

The global credit crunch is also affecting confidence, it said.

Shares in Persimmon crashed 30p to 620p on the gloomy statement, and dragged down the whole housebuilding sector.

At its annualmeeting today, Persimmon called formore Government action to help firsttime buyers finding it almost impossible to findmortgages to get on the property ladder.

While it applauded recent attempts to improve the mortgage market, it called for stamp duty thresholds to be raised and asked the Bank of England for more cuts in interest rates.