Housebuilder says sales have dropped since March due to lack of confidence in the housing market

East London housebuilder Telford Homes has said there has been a 鈥渟ignificant slowdown鈥� in sales since the end of March.

Announcing results for the year ended 31 March 2008, Andrew Wiseman, chief executive, said the company had suffered from poor sentiment among homebuyers.

He said: 鈥淭he reduced availability of mortgage finance is continuing to weaken confidence in the national housing market which makes it more difficult to secure individual sales, even in London, traditionally the most resilient region.鈥�

He pointed to only 鈥渁 handful of sales鈥� at sites in Greenwich and Bethnal Green since March.

The reduced availability of mortgage finance is continuing to weaken confidence in the national housing market

Despite the more recent fall, its policy of pre-selling homes meant turnover increased 54% from 拢104.4m to 拢160.4m over the year.

Pre-tax profit was up 31% from 拢13.5m to 拢17.7m and it said contracts had been exchanged on 73% of properties under construction at 31 March.

Chris Millington, an analyst at Numis Securities, said its gearing level of 144% (debt divided by net assets) was a concern. 鈥淚t includes forward sales, which can always be cancelled. The company has a very big debt burden going into what could be a prolonged downturn.鈥�

Private sales increased from 478 to 523 and the number of affordable units jumped from 84 to 502. Wiseman said the latter model would become 鈥渆ven more significant鈥� in the current climate.

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