There was further evidence of a deteriorating UK housing market as Taylor Wimpey, the country’s largest house builder by volume, cautioned on annual profits for the year to the end of December. Financial Times

Pete Redfearn, chief executive, told investors at the annual meeting that market conditions in the UK had weakened since its annual results in March, when it reported resilient trading. 'We remain very cautious of the UK land market, where we have seen prices starting to fall.'

He warned Taylor’s order book by value had fallen 26% compared with a year ago in a combination of fewer properties at lower prices,

'First-time buyers and investors [face] particular difficulties as a result of the increasingly restricted availability of mortgages. We are seeing pressure on prices, driven primarily by transactions in the secondary market and by mortgage providers.'

Clyde Lewis, an analyst at Citi, said: 'We now expect to see industry volumes drop 25% in 2008 and prices to fall 6%.'