MORE gloom hit the UK housing sector yesterday as volume housebuilder Barratt Developments prepared to cut as many as 1,000 jobs.
The news came a day after rival Taylor Wimpey announced plans to shed 900 staff and close 13 offices.
Shares in Barratt showed a slight recovery on the news, rising 3.1 per cent to 41.5p.
A spokesman confirmed the company was in consultation wi
th employees over cutbacks among its 6,700 staff. A restructuring will result in regional offices in Aberdeen, Chester and Sheffield being closed. It is understood Aberdeen-based Barratt North Scotland will be combined with Barratt's Edinburgh office.
The job cuts will fall on building sites and in sales, administration and support as the firm shrinks the business to meet tougher market conditions.
A Barratt spokesman said: "Our No 1 priority is to ensure that Barratt's core skills are retained."
The group has been under pressure since it paid £2.2 billion for rival Wilson Bowden last year, at the top of the market. It is currently burdened with around £1.7bn in debt.
The firm's share price has since slumped and it has been relegated from the FTSE 100 Index. It is currently in talks with lenders to refinance the debt in order to avoid breaching its covenants. On Tuesday, it was reported that Barratt was seeking an extra £400 million to pay off a £600m short-term loan. The company has refused to confirm this and has held firm on plans to update the market next Tuesday.
On Wednesday, rival housebuilder Taylor Wimpey said it had been unable to clinch a refinancing arrangement with its banks, and has also written off £550m from the value of its UK landbank and work in progress as the market falls.
The UK housing market has suffered as banks hit by the credit crunch cut back on mortgage lending to would-be buyers.
The darkening outlook for the economy has also impacted on sales in the crucial spring selling season, putting the finances of the UK's biggest housebuilders under severe strain.
The full article contains 356 words and appears in The Scotsman newspaper.
