Housebuilder Barratt Developments has said that the credit squeeze and interest rate rises have hurt the UK housing market.
Barratt is the UK's third-largest housebuilder
But the firm, which had earlier warned that such a slowdown was likely, said its outlook remained strong.
In the 19 weeks since 1 July, private sales have been lower than a year ago, but are still at 2005/2006 levels.
Consumer confidence and mortgage availability for would-be owners would be key to 2008 success, it added.
The housebuilder also said it took heart that the "interest rate cycle had peaked".
Rates have risen five times since August 2006, but the Bank of England is seen as being more likely to trim rates in its next move, rather than raise them.
Barratt said that it had been focussing on cutting costs and had steered clear of the buy-to-let market which brought lower profit margins.
Chief executive Mark Clare said the firm was expecting profits to be in line with the guidance given earlier in the year.
"Looking forward, the fundamentals of the market remain strong with demand exceeding supply and with a government committed to increasing the supple of new housing," he said.
Barratt became the third-largest housebuilder in Britain following the purchase of commercial property specialist Wilson Bowden for £2.2bn earlier this year.
Shares in the firm ended nearly 5% lower at £4.80 a share.