There are “highly uncertain” times ahead for housebuilders and house buyers.

The warning from homes giant Persimmon was echoed by analysts, although the outlook is tempered by a modest lift in house prices.

Persimmon said new home completions plummeted 37% year-on-year at 1,439 in the last quarter and added that prices for forward orders of new homes for private sale dipped 2% to around £277,750.

It comes as recent market indicators showed a tentative recovery in October, with Halifax's latest house price index released on Tuesday showing values increased by 1.1% on average month-on-month to £281,974. This compares with a fall of 0.3% in September.

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Nationwide last week reported a 0.9% rise in house prices month-on-month in October, thought to reflect a constrained supply of properties for buyers to choose from on the market.

Oli Creasey, property analyst at Quilter Cheviot, said that the highlight of the trading statement from Persimmon was improved guidance for full year volumes, with the company now expecting 9,500 deliveries in 2023, compared to "at least 9,000" guided to over the summer.

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"That’s good news for investors, as the declining volumes compared to prior years have been the main source of declining profits across the housebuilding industry,” he said. “That said, the sales rates still look depressed compared to history – 0.48 homes sold per week per outlet in Q3 2023 is low when compared to the 0.91x achieved in H1’22 (ie: pre-interest rate rises).

“There has been some improvement in this rate since the end of Q3 – the figure for November was 0.59x, although most of the uptick relates to investor sales."

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He added: "With the company now fully sold for 2023, the volume guidance is locked in, short of a surprising number of last-minute cancellations.

“However, the market conditions for 2024 remain highly uncertain, and PSN (Persimmon) have not provided any guidance for next year at this point.”

Charlie Huggins, manager of the quality shares portfolio at Wealth Club, said there may be light at the end of the tunnel.

“On balance, we're probably nearer the end of the housing market downturn than the beginning,” said Mr Huggins. “But we will need to see interest rate cuts and perhaps further house price declines to build the foundations for a recovery.”