Persimmon building up to a record

MORE evidence of a steady slowdown in the housing market has come from budget housebuilder Persimmon and upmarket estate agent Savills. But both insisted there would be no bursting of the bubble, which has been predicted by some commentators in recent weeks.

Persimmon, which expects record profits again this year, said house-price inflation had slowed over 2002 and would probably be about 10%. It welcomed the more sustainable level of price growth as it indicated new houses were more likely to remain affordable. The vast majority of Persimmon homes cost less than £140,000.

Echoing the trading statements delivered by Bovis and Wimpey on Wednesday, Persimmon also cast doubt on the level of price inflation reported by mortgage lenders. It said: 'New housing has not experienced the same levels of price growth announced by recent indicators in the second-hand market.' It said the number of visitors at its new developments was firm and forward sales for the next year are 15% ahead.

At the other end of the market, Savills, which sells homes at an average £500,000, said it remained confident about prospects. Chief executive Aubrey Adams said: 'Residential markets have remained strong despite concern in the Press of a price bubble. Following a very strong spring, the autumn market has shown itself to be more price sensitive, with good turnover of sales where vendors are prepared to be realistic on price.'