The building industry has been hit by a sales slump

But the York-based company said it expected business to pick up in the spring if the anticipated cuts in UK interest rates were made.

Persimmon said it had experienced more challenging trading conditions in the second half of 2007.

However, it said its full-year profits should be in line with expectations.

Prices resilient

Persimmon said that trading had become tougher since August as lower consumer confidence and the crisis in the credit markets had hit sales. Total completions for 2007 were 15,905, down 5% on 2006.

However, the firm said sales prices had remained resilient, and underlying price growth of its homes was about 3% during the year, taking the average selling price of one of its properties to �189,558.

Forward sales into 2008 were �603m, against �701m at the same point a year ago, with the fall being blamed on market uncertainties.

However, Persimmon said the climate in the housing sector should change.

"Now that interest rates have changed direction and with the spring selling period ahead of us we expect to experience an increase in the level of activity over that achieved in the recent months," the firm said.

"We believe that the underlying fundamentals for our industry remain intact and supportive," it added.

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