Bovis Homes has reported an £8.6 million loss in the first half of the year, despite more mortgages being approved.
The firm named lack of loan availability and rising unemployment as two reasons for its predicament, which includes write-downs of £9.8 million relating to its land portfolio and contracts.
Without these, Bovis reported a pre-tax profit of £1.2 million and said it had made "good progress" overall, with private completions up 18% and overheads slashed by 48%.
The average sales price of private homes plummeted from £196,700 to £164,700 in the two halves of 2008.
Yet the decline is slowing, as the average price was £160,400 for the first six months of 2009.
While house prices have fallen as the property market stagnated, Bovis said the size of the homes it offered for sale had increased.
Private homes legally completed during the first half of this year were an average 996 square feet, compared with 964 square feet in the first half of 2008 and 980 square feet in the second half of 2008.
Bovis said this reflected an approximate 21% fall in price per square foot from the peak early last year.
Group revenues were down 18% in the period to £122.6 million as housing revenue fell by 16% to £120.4 million and Bovis suspended its land sales.
Bovis legally completed 754 homes compared with 851 in the same period last year.
Private reservations were up 92% in the first half, to 901, which Bovis said reflected its aim "to drive volume more assertively" this year.
By the end of the first half Bovis had slashed net debt to £14 million after paying off £94 million following a period of strong net cash inflow.
The firm said it expects to be cash positive at the end of 2009 as it continues to reduce work levels.
Bovis said it had taken actions to shore up the business in response to the sharp downturn in the housing market, including a significant cut in headcount costs.
It said it was now well positioned to take advantage of future opportunities in the property market.
Copyright © Press Association 2009