Housebuilder Taylor Wimpey has reported a 27% drop in house sales since the summer, and warns that as the absence of any improvement to market conditions continues the group may need to make further provisions against its land and work in progress.

Net private reservations for the second half to date average 165 per week, around 27% below the second half of 2007.

The group said: Over the past few weeks, we have seen many of our competitors gradually adopt the same approach, increasing the downward pressure on pricing and challenging volumes. Having secured the sales that we require for this year, we expect to maintain prices at current levels for the next few weeks."

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Britain's biggest housebuilder has also been forced to cut down its workforce to focus on both build and overhead costs.

"For the year to date, we have reduced our headcount in the UK by nearly 1,900 as a result of the previously announced restructuring of our operations and further efficiency savings across our business."

However, the group have welcomed the interest rate reduction announced last week and hopes that this will help the market return to stability more quickly.

It said: "Increased mortgage availability and a return of customer confidence remain the key requirements for a sustained market recovery."

(CD/JM)