Barratt Developments sparks housing market fears

Britain's largest housebuilder put the market on red alert today as it revealed sales fell by up to 10 per cent over the past two weeks amid the credit crunch which hit mortgage lender Northern Rock.

Barratt Developments, which built about one out of every 10 new homes sold last year, said its sales had fallen between 5 per cent and 10 per cent over the week ending last Saturday compared with the week before.

Delivering annual figures today Mark Clare, chief executive of Barratt, said the company would typically see a "strong upward trend" in sales reservations in September, the end of the first quarter of Barratt's financial results.

Barratt is the first of Britain's housebuilders to go public on a sales fallout from the collapse of Nothern Rock. It cautioned that it was "not yet clear how quickly the market will recover" and said investors should assume that there will be "downward pressure" on the number of properties it sells in the short-term.