Housebuilder's six-month update warns of further writedown and reveals 1,000 homes are sitting unsold

The profit margin and forward orders at top-five housebuilder Bellway have slumped to half the level they were this time last year, according to the latest trading update.

The builder told the City this morning that forward orders at 31 January were £296m, compared with £580m at the same point last year. In addition, it said heavy discounting and an increasing proportion of sales going to social housing meant that profit margins could fall by “more than 50%” on the 18.1% figure at the same point in 2008.

The six-month update said that the firm had built 2,014 homes, down from 3,252 in the six months to January 2008, with the average selling price falling by 8.5% to £160,000. Bellway admitted it had 1,000 completed homes sitting unsold.

It added that it was expecting to have to make another writedown in the value of its land holdings when it reported interim results on 31 March.

However, the firm said it was operating well given the wider economic environment, and was comfortably within its committed banking facilities. The housebuilder said it was starting to appraise new land-buying opportunities.