Cancellation rates at Persimmon, the housebuilder, have risen to 35 per cent recently as market conditions scare off prospective buyers.

The level of potential buyers who put down a deposit of up to £700 on a Persimmon house but later decide not to go ahead is usually 15 per cent to 20 per cent but the numbers pulling out and possibly losing all of their deposit rose sharply last month as the credit crisis dominated the news.

Persimmon said: “The availability of mortgages has continued to be very restricted and cancellation rates have increased to about 35 per cent over recent weeks due to these market uncertainties.”

The company said it was writing off £600 million, or 19 per cent, of the value of its land and gave warning that the deterioration of the housing market was accelerating. Persimmon predicted that sale prices on its houses would fall by about 10 per cent in the second half of 2008 - worse than its earlier forecasts.

It said that the increasingly turbulent outlook in financial markets had created uncertainty for home buyers and has “had a negative impact on all our regions across the UK”. Yesterday's statement was brought forward by three weeks as market conditions worsened even faster than had been expected.

Robin Hardy, an analyst at KBC Peel Hunt, the investment bank, expressed concern over Persimmon's £900 million debt and said there was a risk that the company would breach its interest covenants in June of next year.

He added: “The issue we have is with the lack of traditional relationship banking for the company to fall back on should there be any early calls on or reductions in its debt facilities. Its debt is all syndicated or commercial paper-based and these markets are closed.”

Several other leading housebuilders have run into problems with their debt as house prices fall and the availability of credit decreases, although Persimmon has relatively low debt levels.

Crest Nicholson and Taylor Wimpey are both trying to renegotiate the terms of large debts at the moment.

Taylor Wimpey, the UK's biggest housebuilder, is in discussions about its £1.7 billion net debt but the process was held up after the company extended talks to include eurobond holders. It is now unlikely to settle new terms for the debt before the end of the year.

Crest has admitted that it is in danger of breaching its banking covenants before the end of the year.

At its last results in August, Persimmon wrote down £40million on the value of its land bank and said that prices had fallen by about 5 per cent.

It insisted that, despite plunging sales and selling prices, it expected to sell 10,000 homes this year — 35 per cent fewer than last year — with £1.8 billion sales so far and £250 million sales booked for next year.

Persimmon's share price, which has fallen 72 per cent this year, rose by 5per cent to close at 227.25p.

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