PERSIMMON Plc, the UK's largest homebuilder by market value, postponed construction on new sites after sales dropped 24 percent so far this year and cancellations increased. European homebuilders plunged the most since 1999.

Revenue dropped to 1.37 billion pounds (US$2.71 billion) from 1.8 billion pounds and volumes have decreased 18 percent, the company said yesterday in a statement.

Persimmon fell the most in more than 15 years in London trading.

Mortgage approvals in Britain fell by almost half last month to the lowest level since at least 1997 as banks withdrew offers on higher borrowing costs, the British Bankers' Association said on Wednesday. This has exacerbated pressures on the industry and the outlook is becoming "more challenging," Persimmon said, Bloomberg News reported. Property values fell 2.5 percent last month, the most since 1992, knocking the confidence of potential buyers.

Yesterday's statement was "very cautious" by Persimmon's standards, Mark Hake, an analyst at Merrill Lynch & Co in London, said in a note yesterday. "This statement will probably be seen by the market as unhelpful for sentiment."

Persimmon's comments pushed rival British homebuilder stocks down for a third day. Barratt Developments Plc, the UK's second largest homebuilder by volume, and Taylor Wimpey Plc, the No. 1 by sales, declined the most since September 1992, the end of the country's last housing crash.

The Bloomberg European Homebuilders Index dropped 7.7 percent to 194.11, the most since the index was created on December 31, 1998.

"It is difficult to predict when the market will improve," Persimmon said in yesterday's statement. "Against the current backdrop, we have postponed the commencement of scheduled new sites until the mortgage market improves."

Analysts at seven banks have cut their ratings, reduced their share-price targets or lowered their estimates for UK house builders since April 17.