Bovis Homes warned today that unless interest rates are cut immediately and more normal conditions return to the mortgage market, home sales will be well down this year. Bovis home sales are already off 20 per cent.

Chief executive Malcolm Harris, said: "… unless decisive action is taken now to reduce interest rates and more normal conditions return to the mortgage market, it is likely that volumes will be well below those achieved in 2007... although the long term position relating to supply and demand has not changed, the current housing market is weak."

The group also warned that the 40p dividend in had planned to pay this year is now subject to market conditions. Last year’s total is 35p, paid after a 6 per cent fall in pre-tax profits to £123.6 million on revenue down 7 per cent to £555.7 million.

Bovis shares fell 8 per cent to 530p in early trading.

Mr Harris said that 2008 sales reservations up until last Friday were 1,262, compared with 1,582 at the same point last year.

The company warned last month that reservations at the end of last year were 19 per cent lower than the previous year.

Bovis said its underlying operating margin slipped from 23.1 per cent in 2006 to 22.8 per cent last year.

Taylor Wimpey said last Friday that its forward order book was down 20 per cent as writedowns on its US business pushed it into a £19.5 million pre-tax loss for 2007 compared with a £405.5 million profit.

Persimmon, Britain's largest homebuilder, reported at the end of February that its order book was down 19 per cent in 2008. Its pre-tax profits rose 1 per cent rise to £585.1 million in 2007.

Anthony Codling, an analyst with Cazenove, said today that he was expecting a 10 per cent decline in completions this year.

He said in a research note to clients: "Bovis chose to paint a more gloomy picture than Barratt and Persimmon, its commentary more in-line with that of Taylor Wimpey, Redrow, Kier and Galliford Try, namely to expect a challenging year with declining volumes and a continued mix shift to social housing."

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