Telford gloomy on house sales despite upturn

The mortgage drought could keep the brakes on the housing market until at least 2012, a London housebuilder warned today.

East London specialist Telford Homes said recent sales had been "encouraging" but does not expect any "significant improvement" in lending conditions for more than a year.

The warning comes after Bank of England figures showed mortgage loans at an eight-month low this week.

Profits dropped 65% to £2 million in the six months to September 30 as Telford scaled back its development pipeline in the recession, giving it fewer homes to sell.

But it believes longer-term prospects are good and upped its divi from 0.75p to 1.25p.