Woodrow, Wimpey warn of slower UK housing market

George Wimpey and Taylor Woodrow warned this yesterday that they expect the UK housing market to slow over the coming months.

The two companies, which are due to merge next week to create Britain's largest house builder, blamed recent rises in UK interest rates. They also admitted that they are experiencing difficult conditions in America.

"In the UK, we currently anticipate less buoyant market conditions in the second half of the year due to the impact of recent interest rate changes and the effect of these on customer confidence," they said in a joint statement.

UK interest rates have risen by 1% since last August to 5.5%, and are tipped to rise again soon.

Shares in the both companies fell by over 2.5% this morning. George Wimpey lost 13.5p to 511.5p, and Taylor Woodrow fell 10p to 369p.

Taylor Woodrow and George Wimpey both admitted that their profit margins from sales of US houses have fallen already this year, with sales volumes lower. Both firms expect to have reduced the size of their landbanks ,plots for new houses by the end of 2007.