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Argos sales fell 5.8 per cent in the second quarter as a slowing housing market hit the retailer.

Sales for the second quarter totalled £927 million, Argos-owner Home Retail Group (HRG) said.

In a trading statement, HRG said: "While growth remained positive in consumer electronics, it was at a lower rate than the previous quarter. Furniture and homewares continued to show declining sales in challenging market conditions."

As fewer people move house, the homewares and DIY sectors have seen a drop in sales.

Homebase, the group's DIY chain, saw a bigger sales fall of 8.3 per cent, although this was an improvement on the first quarter when sales dropped by 12 per cent.

In light of market conditions, Homebase's assets will be re-assesed, which is expected to lead to "substantial writedowns" the company said.

Terry Duddy, chief executive of HRG, said: "The performance of Argos and Homebase in the latest quarter was reflective of a difficult consumer environment.

"However, the group's focus on cost control should result in benchmark profit for the half-year being in line with our expectations; the group has also had further good cash generation."

Profits for the financial year as a whole will be dependent on the key Christmas period, which is when most retailers make the majority of their profits.