Barratt Developments, the third-largest British homebuilder, gave warning today that tightness in the housing market showed no signs of easing.

The builder, which sold one house in ten in the UK last year, said that in the 19 weeks to November 5, private buyers per site were down by 14 per cent.

The drop is even steeper once buy-to-let investors are taken into account.

The company said that the sharp drop in private sales "reflects the more challenging market conditions but also our decision not to pursue the lower margin segments of the buy-to-let market".

Barratt said that the credit crunch, and five interest rate rises in the past 18 months, have led to the tightness in the private market.

Shares in the homebuilder were savaged last month after earnings downgrades following the fallout from the Northern Rock bank run.

The company said this morning that it had a secured forward order book of £1.8 billion, which represents 61 per cent of its full-year target.

The homebuilder said that cancellation rates were above those of last year but were in line with "historic norms", according to the company.

Last week Harry Hill, the chairman of Countrywide, the estate agency, said that cancellations were at their worst level since the early 1990s.

The update today was not as bad as investors feared, and shares in Barratt rose 11.50p, or 2.23 per cent, in early trading.

Other homebuilders were also on the rise this morning as investors came to the opinion that risks of a downturn have been priced in excessively.

But today a survey by Rightmove, the property website, found that asking prices had fallen by 0.7 per cent, month-on-month, between October 10 and November 10.

It also found a slowing in housing market activity generally, as buyers become increasingly nervous.

The average time needed to sell a house rose from 85 days to 92 days in the month to mid-November.

Rightove said: "Even allowing for a normal seasonal slowdown in activity, this was still the highest November figure since Rightmove started keeping records five years ago."

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