Persimmon profits crash as firm hits out over stamp duty

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The firm said profits crashed 64% in the first six months of the year from £281.1 million to £100.9 million. After a £40 million writedown on the value of its £2.45 billion landbank and further restructuring costs profits were down 87% to just £36.9 million.

Chief executive Mike Farley described conditions in the housing market as the most difficult in recent history as the freeze in mortgage lending scuppered thousands of would-be buyers.

"These are very challenging market conditions," said Farley. "There is normally an increase in activity in the autumn and we want to see how that takes off but it is all down to mortgage lending. It is driven by mortgage activity. People are still out there looking to buy houses but they can't because of a lack of mortgage availability."

Mortgage lending has halved this year as banks and building societies ration home loans in the wake of the credit crunch. Persimmon sold 5501 new homes in the first half compared with 8002 in the same period last year. Average selling price fell from £189,255 to £181,485.

Farley said things have been made worse by suggestions that the Government was thinking of introducing a "stamp duty holiday" to make it easier for first-time buyers in particular to get onto the property ladder. Alistair Darling-was said to be considering deferring stamp duty temporarily to breathe life into the housing market but the Chancellor has been widely criticised for not coming up with any firm plans.

Critics claim it has put off buyers who are waiting to see if they can secure deals for less after any changes. Farley said: "The recent speculation regarding a change to stamp duty on housing transactions has undoubtedly caused further delay and uncertainty in respect of house purchases."

Persimmon has axed 2000 jobs this year as it shelves building until things improve. It today slashed its interim dividend from 18.5p a share to 5p. The shares, which have lost more than three quarters of their value in the past 18 months, were up 9¾p to 308¼p.