Barratt announces 1,200 job losses

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by Kay Murchie

Housebuilder Barratt Developments has announced it is shedding 1,200 jobs as it battles with the housing slump.

The news from Barratt’s follows that from Bovis Homes and Redrow, who yesterday confirmed that they are shedding shed 400 and 550 jobs respectively. Earlier this week, Persimmon announced 2,000 job losses.

It brings the sector’s job losses total to 5,000 this week alone.

Barratt’s also announced that it has reached a deal with its lenders to it shore up its balance sheet. The deal will allow them to extend the repayment of £400 million of debt.

Barratt’s CEO, Mark Clare, said a financial structure has been put in place. It‘s a very challenging market out there and we are going to have to strive going forward.

Barratt’s also confirmed it is to close two divisions and is to merge eight divisions into four, which should see annual costs slashed by around £40 million.

The company said home sales have fallen 43% in the last six months from a year ago while visitor numbers are down 14.8% from a year ago but up 15% on the previous 6 months.

The visitor numbers are holding up well but the problem is the mortgage freeze, said Mr Clare,

The company said it would take an £85 million hit on writing-down the value of land in the 12 months to 30 June, with an additional £30 million wiped off land from its recent acquisition of Wilson Bowden which saw Barratt loaded with £1.66 billion of debt.

Along with fellow housebuilders, Barratt’s is mothballing building projects as the credit crunch continues to discourage prospective homebuyers.

Mr Clare concluded by saying he predicts that house prices will fall by 10% this year.

The Halifax has announced today that house prices in the UK fell by 2% last month, and prices are 6.1% lower than they were compared with this time last year.