Page last updated at 15:05 GMT, Thursday, 3 July 2008 16:05 UK

Housebuilder may axe 1,000 jobs

New Barratt development in Crawley, Sussex

Up to 1,000 jobs are set to be lost at housebuilder Barratt Developments in another blow to the troubled UK property market.

Barratt, which employs 6,700 staff, has begun a consultation process with unions and the cuts are set to be completed within three months.

It warned in May that market conditions had "deteriorated significantly" due to the squeeze on mortgage availability.

Rival developer Taylor Wimpey is already planning to cut about 900 jobs.

Falling demand

Taylor Wimpey's admission on Wednesday that it had been unable to raise 500m in funding due to adverse market conditions sent shares in Barratt Developments down 30%.

On Thursday, however, the firm's shares rebounded by more than 3%.

Barratt will update the market on its recent trading on 10 July but said last month that it continued to operate within its existing banking convenants.

But like all housebuilders, Barratt is having to cope with a sharp fall in demand because of the erosion of confidence in the housing market and the lack of mortgage availability.

In the 19 weeks to May - the last period for which figures are available - its total completions fell 5%, while reservations were down 33% compared with the year before.

The firm has said it expects a "satisfactory" performance in the current year, although profits are expected to be lower than in 2006-7.

The restructuring is expected to result in Barratt reducing its number of regional operations from 32 to 26.

The Midlands and the west of England, where market conditions are currently at their weakest, are likely to be worst hit.

Taylor Wimpey woes hammer shares
02 Jul 08 |  Business
Taylor Wimpey seeks refinancing
30 Jun 08 |  Business
Taylor Wimpey to close 13 offices
20 May 08 |  Business
Barratt upbeat on housing outlook
27 Feb 08 |  Business

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