Building profits fall 96 per cent as crunch hits Londoners

Britain's biggest housebuilder, Taylor Wimpey, today said profits have crashed by 96 per cent as the crisis in the housing market deepened.

The latest high profile victim of the credit crunch, the firm announced that profits in the first six months of the year dived from £119.8million to £4.3million.

It racked up overall losses of £1.54 billion after massive writedowns on the value of its land following the company's creation from the merger of Taylor Woodrow and George Wimpey last year.

Taylor Wimpey, which is Britain's biggest housebuilder by the number of properties built, was worth some £5billion after the merger but has seen its value crumble by 90 per cent in the last 18 months and is now worth little more than £500million.

With the mortgage market frozen, home sales have plummeted by around two thirds. Taylor Wimpey recently slashed 900 jobs and closed a third of its offices to deal with the downturn.

Chief executive Pete Redfern said: "The current operating environment in the housing market remains very challenging and we do not anticipate any recovery in the short term."

It comes as figures revealed that middle class Londoners are four times more in debt than other parts of Britain.

Those in wealthier areas of London and the South-East have run up the highest debts - in excess of £50,000 - and are most at risk from soaring borrowing costs, experts have warned.

A report by credit reference agency Experian shows that people in regions with the highest house prices have been allowed to run up the largest loans.

Examining mortgage and personal loans, overdrafts, credit and store cards and hire purchase agreements for goods such as cars and televisions, the report found that Richmond has the highest total borrowing figures per resident, at £53,533.

This includes £2,047 on personal loans and hire purchase agreements, £1,737 on credit cards, and the rest in mortgage debts. A couple in the borough could therefore owe as much as £107,066. Putney was next highest, where a single resident would owe £47,144. In Chesterfield, the region least in debt, individuals owe £12,192.

Experts are warning that as the credit crunch continues to bite, middle-class families in the South-East will feel the pinch worst of all.

Keith Tondeur, from the advice service Credit Action, said: "Over the past 15 years middle England has had it good but now they are feeling the squeeze."

Those in Kensington and Wandsworth have seen the biggest increases in debts, with a rise of 20 per cent in the past year.

Extra costs include gas and electricity prices soaring by more than £300 and £7,000 added to an average mortgage of £155,000 with rising interest rates.

It was also revealed today that soaring fuel costs are leading to fewer cars on major roads for the first time since congestion was measured.

Analysis of traffic on 34 motorways found that congestion had dropped by 12 per cent in the first six months of this year compared with last year.

Petrol is now more than £1.20 per litre in some places.

Georgina Read, from Trafficmaster, which released the findings, said: "Rising fuel prices and general economic concerns are making people think carefully about how they drive."

The most pronounced fall in traffic was on the northern section of the M25, which showed a 26 per cent cut in jams.