Housebuilders warn that housing market will slow

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by Kay Murchie

George Wimpey and Taylor Woodrow are due to merge next week and will produce Britain’s largest housebuilder. Both companies expect the UK housing market to slow over the next few months.

The companies said recent interest rate increases are to blame for the slowdown. They expect weaker conditions during the latter half of 2007 due to the interest rate hikes. This could cause knock confidence resulting in people putting off decisions to purchase a home.

The American property market is currently causing some difficulties for the two organisations. Their profit margins from sales of US houses have dropped this year with sales volumes lower. It is expected that by the end of the year, both companies will cut down the size of their plots for new houses.