Housebuilder Berkeley Group today reported a shocking collapse in sales and warned the market faced a "bumpy ride" for the rest of the year.

The firm, a specialist at urban regeneration in London and the South-East, said sales of flats and homes fell "more than 50%" between November and April.

Managing director Tony Pidgley blamed the slump on the crisis in the mortgage market with lenders withdrawing offers and jacking up prices.

"It is not the will to buy, although traffic is down and confidence has been dented badly, but that people cannot get a mortgage," he said. "I suspect we are going to have a bumpy ride for the rest of this year. We are not going to sort this out until we have stability and banks start lending money again."

Mortgage lending has dried up in the wake of the credit crunch and the British Bankers Association this week said home loan approvals crashed 56% in May.

It has proved devastating for housebuilders, and Berkeley was today just the latest in the industry to report a massive slump in sales. Berkeley shares have more than halved in the past 12 months - although this makes it one of the better-peforming stocks in the sector - but rose 12p to 675p today.

Despite the slowdown, the firm reported a 3.2% rise in profits to £194.3 million for the year to the end of April. It sold 3167 homes at an average price of £295,000, compared with 3293 at £291,000 the previous year.

Pidgley said: "The reality for the UK housing market is that, in spite of three interest rate cuts, confidence and the all-important feelgood factor have been dented. Although there are signs of optimism with people wanting to buy, the market is unable to recover while there remains a lack of availability of credit. The key risk we face is sales volumes. These will only return to normal levels once the availability of credit returns for customers."

But he said demand among investors and overseas buyers was still strong, with overall sales down 25% last year.

"Whilst the immediate future is undoubtedly extremely challenging, provided the wider economy can avoid recession the long-term outlook need not be bleak," said Pidgley. "There remains under-supply of quality housing throughout the country and London retains its allure as a World City."