Housebuilder Taylor Wimpey, which has developments in Poole (Harbour Reach) and Sturminster Newton (Old Market Walk) has announced a dramatic fall in its profits as property sales slump.

Figures for the first six months of the year show pre-tax profits tumbling to just £4.3 million compared to £119.8 million in the same period last year - this was despite revenue rising by £400 million to £1,984.7 million.

Much of this is attributed to a write down on its land holdings in the UK, North America and Spain which total £690 million, and the write down of goodwill and intangible assets totalling £816 million, while £40 million has been spent on restructuring its UK housing business. As a result the company has cancelled its interim dividend.

Chairman Norman Askew said: "The first half of 2008 has been characterised by the very challenging trading conditions in the UK, US and Spain.

"The board remains convinced of the fundamental value of the business over the medium and long terms and our primary focus is to emend certain of the existing borrowing arrangements."

According to the Royal Institution of Chartered Surveyors, the Taylor Wimpey results demonstrate the acute challenges being faced within the sector which will have wider ramifications for the economy and specifically jobs.

Debbie Walsh, head of public policy and communications for Royal Institution of Chartered Surveyors West said: "Although there are variations in detail across the region, sales volumes across the board have now reportedly fallen to the lowest level seen since the late 1970s, with uncertainty over stamp duty acting as a further brake on the market.

"Prices have been falling since October, and are now, on average, around 10 per cent lower than a year ago, roughly the levels seen in 2006.

"As yet, though, there are relatively few forced sellers, and employment, while beginning to fall, still remains very high by historical standards."