Redrow warns of mortgage squeeze on house builders

Housebuilder Redrow today reported vastly reduced losses but warned that a "chronic shortage" of mortgage supply is holding back the property market.

The firm posted first-half losses of £8.7 million against a shortfall of £46.2 million a year earlier Revenues rose 25% to £187.2 million.

It sold 1266 homes in the six months to 31 December, up from 1042 in the same period the previous year.

Chairman and founder Steve Morgan said: "Whilst the UK housing market has stabilised, lack of mortgage availability is the biggest drag on the market. It is difficult to see any material recovery in the market from current levels until availability improves significantly."

Barratt and Galliford Try made similar comments yesterday despite giving a buoyant outlook for the sector.

Polls show that house prices are continuing to rise after shedding more than a fifth of their value. Prices rose for the seventh consecutive month in January, by 0.6 per cent according to mortgage lender Halifax.