Galliford Try, the construction and housebuilding group, has reported a downfall in profits from the beginning of this year.

It said: "Markets for the Group's Housebuilding division have been difficult throughout the spring selling season. In recent weeks they have shown a further sharp deterioration as the availability of mortgage finance for homebuyers has reduced, with increased costs together with a requirement for more substantial deposits.

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"The board continues to view the economic outlook with caution and is not anticipating an early easing of conditions in the housing market."

However, the company reported its construction and Affordable Housing and Regeneration division were performing strongly.

It said: "In Building we are now achieving project completions on our multi school PFI projects in Northamptonshire and the Highlands of Scotland.

"Also, Our affordable housing and regeneration business has made good progress. Our position in the market was underlined by Galliford Try receiving the largest allocation of direct funding from the Housing Corporation of any developer in the 2008 to 2011 allocations."

(CD/JM)