PERSIMMON Plc, the United Kingdom's second-biggest home builder by market value, said yesterday that first-half sales fell 34 percent,

It has cut 1,100 jobs to lower costs amid the worst British housing slump in 30 years.

Sales by volume dropped 31 percent to 5,501 units and average selling prices declined 4.1 percent to 181,500 pounds (US$357,000) from 189,255 pounds a year earlier, Persimmon said in a statement obtained by Bloomberg News.

Banks have reined in mortgage offers, starving potential home buyers of funds and leading house prices to tumble the most since the country's last recession in 1992.

The UK economy faced "serious risk" of another recession, the British Chambers of Commerce said yesterday.

"There is no hiding place even for the best in class," JPMorgan Cazenove analyst Jeremy Withersgreen said in a note to clients yesterday. "Market conditions are so poor that the group is focusing on cash and costs." He has an "in-line" rating on the stock.

Persimmon shares dropped 8 percent in London to 210 pence and were trading at 224.25 pence as of 8:03am local time yesterday. The stock has declined 68 percent this year, cutting its market value to 684 million pounds.

First-half operating profit would equal about 14 percent of sales, compared with 20.8 percent a year earlier, Persimmon said. Cancellation rates during the period averaged 26 percent from 17 percent last year. Reservations fell 45 percent by volume.

The company expected no "significant" writedown of land values and debt was "comfortably" within its loan conditions, it said.

"We see land writedowns in the tens of millions, not hundreds of millions," Chief Executive Officer Mike Farley said in a telephone interview.

Persimmon has had its price estimate slashed to 215 pence from 400 pence by Merrill Lynch, which assumed land and work-in-progress write-downs of 30 percent.