Fresh evidence that the turmoil in financial markets is hitting housing sales came yesterday from Persimmon, which brought forward a planned trading statement to warn that falling house selling prices have resulted in it writing down the value of its land holdings by a further £600m.

Fresh evidence that the turmoil in financial markets is hitting housing sales came yesterday from Persimmon, which brought forward a planned trading statement to warn that falling house selling prices have resulted in it writing down the value of its land holdings by a further £600m.

The move, which follows a write-down of £40m at the half-year stage, represents around 19% of the value its land bank at June 2008 and comes amid "deteriorating trading conditions", the housebuilder said.

Other housebuilders have written land bank values down earlier, with Taylor Wimpey taking a £600m provision in July.

Persimmon said it expects prices to fall by 10% in the second half of the year as the UK housing market continues to weaken.

However, the York-based company said it expects its borrowings to fall in the second half and for cash generation to be in line with earlier guidance. It also said it continues to comply with all its financing covenants and expects its full-year underlying profit to be in line with market expectations of around £135m.

Mike Farley, Persimmon's chief executive, said house prices had suffered a sharp reduction in September and cancellation rates, which had been at 33% in the summer, were now averaging 35%.

In some weeks in September, the rate had reached 40%, he said. The housebuilder said the uncertain financial outlook had hit all its sales areas in the UK including Scotland. Mortgage availability remains restricted and cancellation rates are at around 35%.

It expects to complete around 10,000 homes for the year to end-December, while sales revenue for the year to date is around £1.8bn.

The company said it was taking a cautious approach to spending on work-in-progress and would continue to reduce its land bank "in line with the scale of its business".

So far, Persimmon had lined up £250m of sales for 2009, and while about 70% of those were for housing associations, the rest could be subject to cancellations.

Persimmon has increased its proportion of social housing to around a quarter by volume and hopes to raise that further.

The group said it backs the government's initiatives to increase mortgage availability to 2007 levels, but until this begins to take effect it does not expect to see an improvement in trading conditions.

Persimmon shares fell by 8% in early trade before recovering to close 10p higher at 227.5p - a gain of 4.6%.

Citi, the US investment bank, said in a research note that the group "remains in a relatively robust position because of its long land bank" despite currently suffering from weaker volumes and prices like the rest of the sector.

Citi analysts, who have a buy rating on Persimmon, added: "We think the current share price is very well supported by the expected cash flow over the next few years.

"It has a pretty robust financial position, proven track record and a strong focus on the operational performance of the business."

Earlier this year, it closed three offices and cut 1100 jobs.

In a move to increase sales in Scotland, Persimmon has reintroduced its "Buy One Get Everything Free" deal in selected plots.

The builder hopes the measure will help more people to buy a home.