(Bloomberg) -- UK developer Persimmon Plc said it’s prepared for another challenging year even amid investor expectations of interest-rate cuts.

The homebuilder said it expects to deliver between 10,000 and 10,500 UK home completions in 2024, compared with 9,922 last year and almost 15,000 in 2022, according to a statement Tuesday. 

“We do not currently anticipate a major improvement in market conditions in 2024, with a general election likely this year and interest rates expected to remain at current levels for some time,” Chairman Roger Devlin said in the statement.

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British homebuilders have been reeling from a slump in demand after higher mortgage rates and a cost-of-living squeeze hit first-time buyers, a group that accounts for roughly a third of Persimmon’s customers. As house completions plunged 33% last year from 2022, the firm slashed hundreds of jobs in a bid to rein in costs.

While a steady reduction in mortgage rates since the summer eased the pressure on developers, a recent uptick has kept costs at a much higher levels than homeowners and would-be buyers have been used to over the past decade. The average two-year fixed-rate mortgage was 5.78% on Monday, up from 5.55% in January, according to Moneyfacts Group Plc.

The gloomy outlook from Persimmon comes less than two weeks after rival Taylor Wimpey Plc warned of a sales dip this year, driven by ongoing macroeconomic uncertainty. 

Read more: Taylor Wimpey Expects Another Annual Drop in UK Home Sales

Persimmon said it expects to access its new £700 million ($896 million) revolving credit facility this year. This will likely move the homebuilder to an average net-debt position through the year from an average net-cash position, resulting in estimated interest charges of about £15 million to £20 million.

In a sign of improvement, Persimmon said its weekly net private sales rate increased to 0.59 in the first 10 weeks of the year, compared with 0.54 in the same period a year earlier. The homebuilder said its average selling price increased by about 3% in 2023, while cancellation rates were around normal levels of about 16%.

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