British Builder Market Conditions Sound Familiar

London, England, Aug. 14, 2008--British construction firm Bellway PLC said sales contracts for the second half of its financial year had been cut by 45 percent compared to the same time last year.

The company said that closed sales dropped by 14 percent in the 12 months to July 31.

Bellway said it was forced to cut an average of 6 percent off the asking prices of the homes, and throw in free extras, like carpets and curtains.

The average sales price of the homes sold by the company  fell to $316,000 for the year, from $324,000 the previous year.

At the same time, the company increased the percentage of social housing it builds for housing associations to 20 percent of its total business. Although those contracts are less lucrative, they promise to continue to supply the group with steady revenue.

"Bearing in mind market conditions, we consider this to be a satisfactory performance," Bellway said.

The group's report said that "realism has returned to the market with many sellers dropping their asking prices to more realistic levels."

Britain's construction industry is being hurt by the credit crunch, which has seen the country suffer from annual house price falls of around 9 percent.

"The lack of mortgage finance has brought the housing market to a virtual standstill with first-time buyers rapidly becoming an endangered species," Ian Perry, a spokesman for the Royal Institute of Chartered Surveyors, said.

Jobs in the building sector were shed at the fastest rate in more than a decade in July, Britain's Chartered Institute of Purchasing and Supply said.