US builder hit by mortgage woes

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US house builder Toll Brothers has seen its latest profits fall 85% after tightening mortgage standards meant a reduction in successful buyers.

With the sub-prime mortgage sector crisis meaning all home loans are now harder to get in the US, Toll is just the latest builder to warn of woes.

Its profits for the three months until the end of 31 July, fell to $26.5m (£13.3m) from $174.6m a year earlier.

Toll said the number of cancellations were now the highest in 21 years.

"We continue to wrestle with the interrelated challenges of softer demand and excess housing supply in most markets," said chairman and chief executive Robert Toll.

The firm said it would now be reducing house production until the current oversupply was over.

The crisis in the sub-prime sector has been caused by record defaults over the past year as mortgage rates have gone up.