Mark Clare, chief executive of Barratt Homes, warned this week that there was likely to be downward pressure on housing volumes and price inflation as the credit crunch takes its toll.

Clare spoke as Barratt, the UK’s second largest housebuilder, posted strong full year results. Its pre-tax profit rose 16% to £454m, before restructuring costs, and 9.3% once these costs were included. Completions increased 17.6% to 17,168.

Clare said the company had made good progress, despite challenging conditions, but warned of a tightening market in 2007/08. He said: “It is not yet clear how quickly the market will recover but the market fundamentals remain strong.”