Housing reservations down by two thirds

Confidential figures from the House Builders Federation show housing reservations have fallen by almost two thirds on the same period in 2007.

The weekly statistics, which the HBF releases to its members but does not publish, showed that numbers were 63% down last week to 430.

The news will come as a blow to the industry during what is the typically strong spring selling season.

One source said: “The spring figures are at the same level as they were in January this year. There has been a rapid deterioration in the last four weeks which has led to this massive fall.”

Another housebuilding source said: “It makes pretty bad reading but confirms our feeling that things have got worse in the last month. It’s awful out there at the moment.”

The HBF declined to comment on the figures.

The statistics come in a bad week for the industry which saw Persimmon put a freeze on new developments until liquidity returns to the mortgage market. Although it described its March trading figures as “flat”, it is understood that reservations in April at Persimmon were 50% down on 2007 levels.

One City analyst said: “April is the month when the real intensity of the credit crunch has come out of the woodwork. Housebuilders are unanimously citing the mortgage availability problem. Following what the banks have done and the way it has been covered in the media, people have simply backed away from the market.”

Robin Hardy, an analyst at KBC Peel Hunt, said housebuilders were working on the assumption of a minimum fall of 25% over the year but that it may grow. He said: “It’s like driving with a blindfold on – nobody knows where we’ll end up. Housebuilders are dealing with the banking problem, which is out of their control. In turn, the banks are dealing with the credit crunch problem that is out of theirs.”