Investors are braced for more bad news from the troubled housebuilding sector when Barratt Developments, the most indebted of its peers, updates the market tomorrow.

Housebuilders Redrow and Galliford Try became the latest to report dire conditions today, warning investors that they have been hit by a sharp slowdown in the housing sector during the typically bouyant spring season.

Redrow cautioned in a trading update that, to date, reservations in the second half of the financial year are 50 per cent below the same period last year, blaming the reduced availability of mortgages.

Cancellations had been had been running at just over 20 per cent but the builder reported that it had experienced "a marked increase since Easter".

Analysts started paring back their forecasts for the group following the news.

Galliford Try issued a profits warning, revealing that its full-year profit would be around £60 million-plus, significantly below market estimates of £76.6 million.

The builder said that while the market had been difficult throughout the spring, “in recent weeks they have shown a further sharp deterioration as the availability of mortgage finance for homebuyers has reduced”.

Analysts are worried that Barratt will write down a quarter of the value of its land and halt its building programme.

Alastair Stewart, a Dresdner Kleinwort analyst, has predicted that Barratt will write-off up to a quarter of its land bank.

Mr Stewart said: "Land-sellers have told us it instigated a total moratorium on land-buying months ago."

"We do not think there will be a rights issues, but a major restructuring cannot be ruled out,” he said.

The Royal Institution of Chartered Surveyors (RICS) reported today that house prices fell in every region of Britain in April.

Galliford Try shares were down over 1 per cent while Redrow shares fell 3 per cent following the reports.

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