Housebuilders Redrow and Bovis Homes are the latest to announce jobs losses, saying they have been forced to reduce their workforces by around 40% since the start of the year.
They blamed the dramatic decline on a severe shortage of mortgage availability caused by the credit squeeze and a lack of confidence because of uncertainty over house prices and interest rates.
Bovis is closing its eastern regional office and transferring control to central and southeast offices. It is also amalgamating key functions of its northern region with its central region.
Redrow completed 3,925 new homes in the year to June 2008 compared with 4,823 for the same period a year earlier. The average selling price was £157,000 (£159,900 in 2006/07). Bovis sold 851 homes for the six months ended June 30 compared with 1,256 homes sold in the corresponding period a year earlier, a reduction of 32%. The average selling price for its homes for the first six months of 2008 was £167,500 compared with £189,600 for the first half of 2007.
“The market for both new and second-hand homes has declined rapidly to transaction levels not experienced for very many years, with the price of homes now declining,” Redrow said in a statement. “Net reservation levels in the second half of the financial year were 55% below the level achieved last year.”
It added it was difficult to assess how long the sharp reduction in sales activity would continue or how hard house prices would be hit: “However, we expect that the difficult markets we are confronting may persist for some time.”
According to Bovis, trading conditions represented “the worst market backdrop that the Group has seen for many years.”
These latest statements follow recent announcements of 1,000 job cuts by Barratt, 900 by Taylor Wimpey and 2,000 at Persimmon (comprising 1,100 office jobs and 900 site-based jobs) since the beginning of the year.
