(Reuters) – Persimmon, Britain’s second-largest housebuilder, warned on 2023 profit margins on Tuesday, after house prices deteriorated and its sales rate slipped, as the political and economic turmoil in the country and a deepening cost-of-living crisis weighed on sentiment.

Persimmon shares fell more than 7% in early trade and the company’s warning also dragged stocks of other top housebuilders such as Barratt and Taylor Wimpey sharply lower.

Persimmon said “uniquely disruptive political conditions and deteriorating economic outlook” since September led to a steeper drop in its average sales rate to 0.48 in the last six weeks, with average selling prices falling about 2% in the same period compared with the 12 weeks from July 1.

Cancellation rates rose to 28% from 21% during the last six weeks of the period.

The company, however, did not provide any details on margin outlook adding that it was too early to provide specific guidance for 2023 given the rapid change in market conditions.

The UK housing market has been showing signs of a slowdown in recent months as surging inflation hits consumers’ budgets amid a sharp rise in interest rates, while government’s mini budget in September led to a surge in mortgage rates.

“Rising interest rates and broader economic uncertainty are clearly impacting mortgage lending and customer behaviour,” Chief Executive Officer Dean Finch said.

British house prices fell in October at the fastest monthly rate since February last year after the government’s 45 billion pound ($52 billion) unfunded package of tax cuts prompted turmoil in UK markets. Analysts at HSBC have also warned that the UK is on the cusp of a housing downturn.

York-based Persimmon, which offers studio apartments to five-bedroom houses, said its average net private weekly sales rate per outlet stood at 0.60 between July 1 and Nov. 7, compared with 0.78 a year earlier. It dropped further to 0.48 in the last six weeks of the reported period.

Persimmon reaffirmed its full-year volume target of 14,500-15,000 units but said it expects 2023 land additions to be significantly lower than the previous year.

The FTSE 100 firm said the building safety provision was expected to be increased to 350 million pounds.

($1 = 0.8720 pounds)

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Subhranshu Sahu and David Evans)