Redrow, the British housebuilder, has slashed its full-year dividend to cope with "very challenging markets" after the company plunged into a £194 million pre-tax loss.

Shareholders in Redrow will receive an interim dividend but not a payout for the full year, giving investors 9.3p a share compared with 15.6p last year.

Alan Bowkett, chairman of Redrow, said: "In these unprecedented market conditions we have moved quickly to prioritise cash flow and the reduction of cost."

Redrow revealed that net reservations for its houses was 55 per cent lower in the second six months of the year to June 30, resulting in forward orders down 45 per cent on the same period last year.

Like others in its sector, Redrow has laid off staff, including 540 permanent workers and an unspecified number of casual staff in July after being hit by plummeting house sales. At the time, Neil Fitzsimmons, Redrow's chief executive, described conditions as worse than the housing market slump of the early 1990s.

Redrow reported today that full-year revenue fell by 22 per cent to £650 million, while £121.1 million in profit last year turned into a £193.9 million loss after a £259.4 million writedown on the value of its land and ongoing projects.

However, shares in the company rose 15p to 204.75p today after Redrow disclosed that it has secured a new three-year debt facility of £450 million.

Redrow said that it completed 3,925 new houses in the year, almost 19 per cent lower than last year, with the average selling price falling from £159,900 in 2007 to £156,900.

Mr Bowkett blamed the fall on mortgage companies tightening their lending criteria, making it harder for people to buy property.

"More recently, homebuyer confidence has been further affect by concerns about the future for house prices and the wellbeing of the UK economy," he said.

Redrow cut its administrative costs by 22 per cent and said in July that it would make additional reductions worth £15 million a year.

Its land bank has fallen to 16,540 plots, down from 20,200 last year, as the company avoided buying more property in the falling market.

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