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Barratt Developments, the UK's third-largest housebuilder, has warned conditions remain tight in the property market.

The company stressed today a series of past interest rate rises and the ongoing global credit crunch had continued to impact upon the housing sector over recent weeks.

In a statement Barratt confirmed that, compared to strong trading last year, private sales for each of its sites were lower in the 19-week period to July 1st.

The homebuilder explained the drop in sales reflected both current market conditions and its decision to avoid the lower margin segments of the buy-to-let market.

In addition the company has continued to focus on improving operating margins in order to boost its performance, including by taking action to reduce costs.

Barratt said it expected its half-year operating margin to be broadly in line with previous guidance, with the group having achieved a two per cent increase in net average selling prices at the end of October.

The company also stressed it maintained a "strong" forward order book, which currently stands at around £1.8 billion.

Remarking on the outlook for the group, Barratt chief executive Mark Clare said: "We expect to enter the New Year with increased outlets, a highly focused sales operation and with an increased expectation that the interest rate cycle has peaked.

"However, consumer confidence and mortgage finance availability and pricing, will be key to determining the success of the 2008 spring selling season," he warned.

Barratt said it was continuing to optimise its land spend in order to capitalise on any improvement in market conditions.

Meanwhile the company, which acquired rival Wilson Bowden in a £2.2 billion deal earlier this year, added the fundamentals of the market remain strong – with demand for housing continuing to exceed supply and the government committed to building more homes.