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Last Updated: Tuesday, 5 July, 2005, 10:10 GMT 11:10 UK
Wimpey hit by property slowdown
Wimpey home
Wimpey is the UK's third largest housebuilder
Housebuilder George Wimpey has warned that its profits will be cut by a "considerable softening" in the UK housing market.

Wimpey said profits for the six months to 3 July would be "well below" the record levels enjoyed at the same time last year, with UK sales down 17.5%.

It added that it expected house buyers to remain cautious but said property prices were still stable.

Recent housing surveys have showed a sharp slowdown in house price rises.

Wimpey shares dipped 12.25 pence or 2.7% to 443.75 pence by mid-morning.

Weaker order book

Wimpey said UK house prices have remained broadly unchanged since mid-2004.

Since February the market has remained steady at a level well below the very strong first few months of last year
George Wimpey statement

However, the firm has been helped by a strong performance in the US, where it said sales remained strong.

In contrast, its core UK division is expected to report a 10% fall in new home completions during 2005 as a whole.

It said that higher incentives and increased costs would cut first-half profit margins at its UK business by about 2.5%.

Wimpey's 2005 order book is currently 7% lower by volumes and 12% lower by value than 2004.

"Since February the market has remained steady at a level well below the very strong first few months of last year," it said in a statement.

Wimpey is the UK's third largest home builder by value.

The firm's comments, come just days after the latest survey from the Nationwide building society said prices dipped by 0.2% in June. Both the Nationwide and Halifax have seen house prices broadly flat since the start of the year.

On Monday, builders merchant Travis Perkins said sales were down because of people reining in expenditure on DIY and home improvements.

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