East London housebuilder Telford Homes has announced a “significant slowdown” in sales since the end of March.
Announcing results for year ending 31 March 2008, Andrew Wiseman, chief executive, said the company had suffered from poor sentiment among homebuyers.
He said: “The 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.”
He pointed to “a handful of sales” at sites in Greenwich and Bethnal Green since March.
Despite the recent fall, the company’s policy of pre-selling homes meant turnover increased by 54% from £104.4m to £160.4m over the year, with pre-tax profit up 31% from £13.5m to £17.7m.
Chris Millington, an analyst at Numis Securities, said its gearing level of 144% (debt divided by net assets) was a concern.
“It includes forward sales, which can always be cancelled. The company has a very big debt burden going into what could be a prolonged downturn.”