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The credit crunch in the mortgage market has hit a leading housebuilder “Persimmon” Their  sales have dropped by nearly 20% so far this year.

A spokesman for Persimmon  said housing market activity had “deteriorated” significantly in the past three weeks as mortgages became scarcer and consumer confidence fell.

It was “difficult” to say when things would improve and more support was needed for first time buyers, it said.

Persimmon shares fell 6% during early trading on the news.

Volumes of Sales were down 18% so far this year, Persimmon stated  also stated the demand for new properties had fallen. Lower demand meant Persimmon had to offer greater discounts and spend more on advertising, in turn hitting the companies financial performance this year.

Because of the uncertainties in the global economy and the UK lending environment, it is difficult to predict when the market will improve Persimmon statement

Its turnover was affected, falling 24% to £1.37bn over the period from 1 January.

Persimmon stated that  it expected market conditions to become “more challenging” as new customers struggled to access mortgages.

“Because of the uncertainties in the global economy and the UK lending environment, it is difficult to predict when the market will improve,” the firm said.

The firm also added that the market has to improve “at some stage” given the demand for more housing in the UK.

The Government have urged lenders to pass on the Bank of England rate cuts in full to stimulate activity in the current market.