Wilson Bowden yesterday said that fears of unemployment could further undermine Britain's fragile housing market - compounding a first half in which the housebuilder completed ten per cent fewer sales.
Britain's fifth- biggest housebuilder said the market had failed to pick up since a drop off in sales before May's General Election.
Prices remained flat through the first half and it also had to offer more incentives to entice buyers.
"Housing market conditions have remained subdued since the AGM on April 27, and reservation levels have not recovered," Wilson Bowden said in a statement.
Shares in the firm slipped 31/2 per cent to 1,110p following the announcement. The stock has underperformed the UK building sector by nine per cent since the beginning of the year.
Chief executive Ian Robertson said the market had been buoyed by news that two of the Bank of England's nine interest rate setters had voted for a cut this month. But retail weakness and high profile job layoffs like that seen at MG Rover had triggered job concerns.
"Clearly there are pleasantly encouraging noises coming out on interest rates," said Mr Robertson.
"The dilemma for me is whether these encouraging noises on interest rates will outweigh what I think is an underlying concern on the job front that hasn't been there for some years."
Economists and estate agents have warned that a rise in unemployment could lead to a sharp correction in the housing market, in contrast to the gradual slowdown seen so far.
Earlier this month, official data showed the number of people in Britain out of work and claiming benefits rose for a fourth month in May, the longest stretch of increases in almost 13 years.
Wilson Bowden said sales per site fell by 22 per cent in the first half and Mr Robertson said it had increased outlets by more than 20 per cent over the last 12 months to try to compensate.
"What we are missing are the casual window shoppers some of whom, in more normal times, we can persuade to buy," he said.
Lucrative small-time investors had largely disappeared, and while bigger property investors remained, they were squeezing out bigger discounts, he added.
Wilson Bowden's average selling price and margin are also likely to be hit by a larger proportion of sales coming from apartments, which are less lucrative per square foot than houses.
Mr Robertson said he did not expect selling-price inflation to rise in the second half. "I don't see the prospect of that changing very much in the near future." Shares closed down 20p to 1130p.