In the financial results, Berkeley revealed that sales since the end of September are around 25% lower than they were for the first five months of the financial year, although it says prices have remained firm.

Berkeley has maintained guidance for £600m of pre-tax earnings this year.

However, the group cut its forecast for the following two years to “at least £1.05bn” after previously being forecast at £1.25bn, reflecting more difficult economic conditions.

Commenting on the results, Wealth Club head of equities Charlie Huggins says: “Cracks are starting to appear in the housing market, with prices falling in recent months and all the builders warning of a significant slowdown in new sales.”

“The trouble is, the impact of interest rate rises has yet to be really felt, so worse is probably still to come. Many homeowners are locked into cheap fixed rate mortgages. When they come to refinance, they could be in for a nasty shock.”

“As a result, Berkeley is battening down the hatches. It has taken its foot off the investment accelerator and will prioritise cash and margins. This, combined with a very healthy forward order book of £2.3bn, and a strong balance sheet, puts Berkeley in a good position to navigate these tougher times.”

“In the long run, a more difficult market could present opportunities. Berkeley has excelled in an area where many other builders struggle – capital allocation. It snapped up cheap land during the 2008/09 financial crisis, enjoying several years of bumper profits when house prices recovered. If Berkeley can grasp the nettle in a similar fashion this time around, it could turn any short-term market weakness into a long-term advantage.”

“For now though, near-term prospects for Berkeley and its peers are the most uncertain they’ve been since the financial crisis. The only saving grace is that share prices already incorporate a lot of doom and gloom. If the housing market holds up even slightly better than expected, it could lay the foundations for a recovery.”