Bellway PLC (LSE:BWY) said demand for its houses has slumped by almost a third in recent months with its order book down more than 40% from the level of a year ago.
In a statement with its full-year results, the FTSE 250 housebuilder said orders currently are worth £1.23 billion or 4,636 homes compared to £2.1bn or 7,257 at the same time in 2022.
Private reservations since 1 August are running at 99 per week against 133 a year ago, it added.
Bellway said that this lower demand will mean a "material reduction in volume" in the current financial year with its target now to sell 7,500 homes against 10,945 in the year just ended.
Prices are expected to fall to an average of £295,000 from £310,306.
Revenues in the 12 months to end July dropped by 3.7% to £3.4 billion with underlying profits 18% lower at £532 million.
Jason Honeyman, chief executive, said it was a resilient performance against a backdrop of "rising mortgage interest rates and challenging market conditions".
“Looking ahead, our operational strength and experienced teams will enable the group to successfully navigate a changing market.”
The dividend for the year is unchanged at 140p.