House prices have stabilised and more people are looking for a new home, according to Barratt Developments.

But the recent upbeat note being struck by Britain's leading housebuilders was not being shared by smaller listed rival Redrow, which today issued a profit warning after reporting a 46% slump in sales. It also announced a wholsesale “review” of its business.

Barratt admitted its latest figures revealed the extent of a shocking 12 months with the number of homes it shifted down almost 30% and the price on completion for private houses down nearly 20% year on year.

But Mark Clare, the former boss of British Gas who now runs Barratt said: “We have been seeing since May early signs of stability. In recent weeks, we have seen higher sales rates, lower cancellations and prices levelling.

“We are not, however, going to see a sustained improvement in trading conditions until the availability of mortgage finance, particularly in the higher loan-to-value segment, recovers.”

Green shoots have prompted Clare to begin work in 11 developments around London, including a 1000-plot build at the old St Andrew's Hospital in Bromley-by-Bow.

At Redrow, Steve Morgan told shareholders “the dramatic housing market adjustment” and “significant pricing pressure” would mean its profits would come in at the lower end of analysts already downwardly revised forecasts.