Sales of new homes by Kent-based housebuilder Bovis slumped by more than a thousand last year.

The company, with its head office in New Ash Green, near Gravesend, said trading conditions in housebuilding in 2008 were the worst for many years.

Overall legal completions fell 38 per cent from 2,930 in 2007 to 1,817 in 2008.

Many of these were so-called affordable homes built for social and partnership groups with the average sale price falling from £179,500 in 2007 to £150,800.

The overall number of private sales fell from 2,293 in 2007 to 1,223 in 2008, a drop of 46 per cent. The average price fell from £206,200 in 2007 to £181,100.

In a trading update issued less than 24 hours after the Bank of England cut the base rate to 1.5 per cent, its lowest level since the Bank was founded in 1694, Bovis said the outlook for the housing market, combined with that of the wider economy, appeared challenging.

"Confidence is low, bad news predominates, and corrective economic actions which have worked historically have not yet seen a positive response."

But it was cautiously upbeat about future prospects. "Interest rates are likely to remain low and with lower house prices, affordability will improve. When consumer confidence returns, the low levels of current housebuilding across the counrty will accentuate the well-publicised supply and demand dynamic in the UK housing market."

The Group says its priority is to maintain a strong balance sheet and believes its land bank, strong range of products, and recently renewed £220m credit facility will enable it to "weather current market conditions in an orderly fashion and be well-positioned for any market upturn."

Bovis announced that it would not be paying a final dividend and will make a full trading statement for 2008 on March 9.

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