The Bank of England said on Wednesday the cost of a two-year fixed-rate mortgage rose 0.37 percentage point in June to 6.63 percent, the highest since February 2000.
Redrow Chief Executive Neil Fitzsimmons said consumers' lack of confidence was now having a bigger impact on sales than their difficulties getting a mortgage, adding reservations in the six months to end-June were down 55 percent.
Fitzsimmons said that until Easter the lack of mortgages was the main factor hitting sales but since then the biggest issue was people's general concern about the economy turning into fears for their own jobs.
Mutually-owned Nationwide Building Society's monthly consumer confidence survey on Wednesday returned its lowest headline reading since the series began in May 2004, which the lender said was not surprising given reports of rising inflation rates, weaker economic growth and falls in house prices.
The biggest change the survey found was people's view on the economic outlook with 53 percent of respondents expecting things to be worse in six months' time, up from 46 percent in May and 29 percent a year ago.
But some detail in the survey was less downbeat with falling confidence doing little to alter Britons' spending plans.
SALES DOWN
Redrow sold 3,925 homes in the year to end-June, down 19 percent on 2006-07. The average selling price fell 2 percent to 157,000 pounds.
Bovis's completed sales fell a third to 851 houses at an average price down 4 percent to 196,500 pounds.
Citi analysts said it saw little reason to change its forecasts with Bovis expecting a similar pattern to volumes for the remainder of year.
House price growth had been driven by demand - the government estimates the number of households is outgrowing housing stock by 38,000 every year due to immigration and more people living alone. Analysts see this cushioning the fall in the longer term.
Landsbanki analyst Simon Brown said: "The current position is out of the control of Redrow and its peers and shows no sign of abatement.
"It will be interesting to see what Barratt have to say tomorrow (Thursday). One suspects a rather more effective sales effort will show its benefits even in this market," he said.
