Builder confirms 900 jobs will go

‘Significant downturn’ in business

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ONE of the UK’s biggest housebuilders today confirmed it was axing 900 jobs to help cope with a “significant downturn” in business.

And shares in Taylor Wimpey halved today after a grim update on sales and the state of its finances.

The beleagured housebuilder saw more than £300 million wiped off its shares.

The firm, which is Britain’s biggest housebuilder in terms of houses built, said: “We expect that the UK housing market will remain weak at least through 2008 and we do not anticipate any recovery in the short-term.”

Taylor Wimpey said it was closing 13 regional offices and reducing general staffing levels after suffering a “sharp” decline in reservations since April.

The firm said its house completions fell by a third during the first six months this year, and that it was not expecting any recovery “in the short-term”.

Its shares plunged nearly 50%, or 28p to 31.75p – less than a tenth of their value a year ago.

Rivals Barratt Developments and Persimmon were also hit, with shares down more than 20% and 16% respectively.

UK housebuilders have been badly hit by the credit crunch, which has sent mortgage approval levels plunging to historic lows, hitting the housing market.

And a survey revealed today construction activity slowed at its fastest rate for at least 11 years last month as the sector was hit by a sharp slump in house building.

The Chartered Institute of Purchasing and Supply said its Construction Purchasing Managers’ Index – which measures overall industry performance – dropped 5.1 points to 38.8 in June, the biggest monthly fall since the survey began in April 1997. A figure of 50 represents growth.

The CIPS housing activity index dropped to 25.6 in June from 32.7 the previous month, also the lowest reading on record.

The survey came as another report from the Royal Institution for Chartered Surveyors (RICS) found that the building of new homes was falling at its fastest pace since 1995.

RICS said 19% more surveyors reported a fall than a rise in construction workloads during the second quarter of this year, compared with 1% registering more work in the first three months.