Three of Britain's biggest property companies have warned investors of worsening trading conditions as the slowdown in the housing market continued to bite.
Bellway, the country's fifth-largest housebuilder, warned it now expected to sell up to 15 per cent fewer properties this year, with reservations down 31 per cent since the beginning of February, while Helical Bar and Quintain Estates also reported setbacks. John Watson, Bellway's chief executive, said the upswing in interest from buyers usually associated with spring had not happened this year. "The restricted mortgage supply, combined with a sapping of consumer confidence, is leading to further market weakness," he said.
Bellway has been forced to offer buyers more generous discounts and incentives to sell its properties. As a result, the company's margin is suffering. Mr Watson said the company had become "highly selective" about acquiring new development sites, and was now avoiding new-build flats, the sector of the housing market hit hardest by price falls. However, Bellway said conditions around the UK continued to vary, with Scotland and the Thames Gateway proving more resilient than the Midlands, Yorkshire and the North-west.
Aynsley Lammin, an analyst at Citigroup, said Bellway's update, and figures from Halifax Bank, which said house prices fell by 2.4 per cent in May, suggested there was "no sign of any light at the end of the tunnel". He warned: "How much house prices fall by is the key issue for the sector, with the stock market focusing on balance sheets and potential write-downs."
Helical Bar said it saw little prospect of any upturn in sentiment over the next 12 months. The property development and investment group, which yesterday reported a pre-tax loss of £24.3m for the past 12 months, compared with a profit of £60.1m last year, warned of a "major adjustment in prices".
Quintain Estates said its net asset value had fallen by 11 per cent over the past 12 months, with the company forced to write down the value of its Wembley development by 11 per cent. It warned the "bear market" was continuing.