Wimpey is the UK's third largest housebuilder
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Housebuilder George Wimpey has warned that its profits will be cut by a "considerable softening" in the UK housing market.
Wimpey said profits for the six months to 3 July would be "well below" the record levels enjoyed at the same time last year, with UK sales down 17.5%.
It added that it expected house buyers to remain cautious but said property prices were still stable.
Recent housing surveys have showed a sharp slowdown in house price rises.
Wimpey shares dipped 12.25 pence or 2.7% to 443.75 pence by mid-morning.
Weaker order book
Wimpey said UK house prices have remained broadly unchanged since mid-2004.
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Since February the market has remained steady at a level well below the very strong first few months of last year
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However, the firm has been helped by a strong performance in the US, where it said sales remained strong.
In contrast, its core UK division is expected to report a 10% fall in new home completions during 2005 as a whole.
It said that higher incentives and increased costs would cut first-half profit margins at its UK business by about 2.5%.
Wimpey's 2005 order book is currently 7% lower by volumes and 12% lower by value than 2004.
"Since February the market has remained steady at a level well below the very strong first few months of last year," it said in a statement.
Wimpey is the UK's third largest home builder by value.
The firm's comments, come just days after the latest survey from the Nationwide building society said prices dipped by 0.2% in June. Both the Nationwide and Halifax have seen house prices broadly flat since the start of the year.
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