U.K. Homebuilding Industry to Cut Tens of Thousands of Jobs
May 21 (Bloomberg) -- The U.K.'s homebuilding industry will have to cut tens of thousands of jobs as the 19 billion-pound ($37 billion) market grapples with a credit squeeze and tumbling demand.
``There isn't a builder in the land who isn't considering overheads and job losses,'' Stewart Baseley, chairman of the Home Builders Federation, said in an interview yesterday. Estimated job losses ``will be in the tens of thousands,'' he said.
Reducing the 300,000-strong workforce, including subcontractors, will affect all regions of the country and knock- on effects will be felt in related industries, from building- material suppliers, solicitors to removal men, said the chairman.
Baseley said the current housing slump is unlike any other, caused by a dramatic tightening in credit rather than high unemployment or borrowing rates. The number of mortgages granted dropped to a record low in March, almost half the level of the previous year. Taylor Wimpey Plc, Britain's biggest homebuilder, may cut 600 jobs and its next biggest rival, Persimmon Plc, has postponed work on new developments.
``I've never seen a downturn escalate as quickly as this,'' the chairman said. Trying to compare it with previous downturns ``is like comparing apples and oranges.''
The average cost of a home in Britain declined 2.5 percent to 191,556 pounds in March, mortgage provider HBOS Plc said April 8, the steepest drop since 1992. ABN Amro Holding NV analysts including William Jones said May 8 they expect house prices to drop 15 percent by the end of 2009.
The Bank of England offered in April to swap at least 50 billion pounds of government bonds for mortgage securities to kick-start bank lending.
``The data is one way at the moment,'' Baseley said. Government measures including abolishing the housing sales tax known as stamp duty for some first-time buyers or those with little equity should be implemented, he said.
BLOOMBERG
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