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| Job cuts at housebuilder Barratt | |
| (about 4 hours later) | |
| UK housebuilder Barratt Developments has confirmed it is cutting more than a thousand jobs due to the housing slump and the squeeze on mortgage lending. | |
| Barratt, which employs 6,700 staff, said it was cutting 1,200 jobs by closing two divisions and merging other parts of its business. | Barratt, which employs 6,700 staff, said it was cutting 1,200 jobs by closing two divisions and merging other parts of its business. |
| The company also said it had reached a deal with its lenders to give it extra breathing space to pay back its debt. | The company also said it had reached a deal with its lenders to give it extra breathing space to pay back its debt. |
| It added it expected housing production to hit a 50-year low in 2008. | It added it expected housing production to hit a 50-year low in 2008. |
| Barratt said a £400m debt facility, which was due to be paid next April, has been extended to July 2011, boosting its share price. | |
| The pinch is a lot tighter than most people think with the average brickie team lucky to have 6 weeks work in front of them Derek, East Lothian href="/1/hi/talking_point/7499584.stm">How staff and contractors are being hit by housing woes | |
| 'Challenging period' | |
| It has also agreed a new deal with its banks to reduce the chance of breaching it debt covenants. | It has also agreed a new deal with its banks to reduce the chance of breaching it debt covenants. |
| Chief executive Mark Clare said: "We have now substantially improve our competitive position and are better placed to deal with what will be a very challenging period ahead." | Chief executive Mark Clare said: "We have now substantially improve our competitive position and are better placed to deal with what will be a very challenging period ahead." |
| The firm has been hit by a sharp drop in the number of available mortgages for consumers and the wider housing downturn. | The firm has been hit by a sharp drop in the number of available mortgages for consumers and the wider housing downturn. |
| Barratt said total sales completions fell by 13.8% in the year to June, compared with 2007. | Barratt said total sales completions fell by 13.8% in the year to June, compared with 2007. |
| FROM THE TODAY PROGRAMME class="" href="http://news.bbc.co.uk/today/hi/default.stm">More from Today programme | |
| Completions for private homes fell 18.4% with more than a fifth of these deals were for social housing. | |
| Average sales rates to private buyers fell 43% year-on-year in the past six months. | Average sales rates to private buyers fell 43% year-on-year in the past six months. |
| Cancellation rates for its homes jumped 33.6% over the past year, reflecting the "acute shortage of mortgage finance", Barratt said. | Cancellation rates for its homes jumped 33.6% over the past year, reflecting the "acute shortage of mortgage finance", Barratt said. |
| Fears have been mounting over housebuilder's balance sheets and their funding arrangements which are partly dependent on land values, which have been dented by falling property prices. | |
| Barratt reported a writedown of £115m from its landbank - smaller than the £550 revealed last week by rival Taylor Wimpey - which has so far failed to secure a funding package with investors. | |
| On Wednesday Bovis Homes and Redrow became the latest UK housebuilders to announce a sweeping reduction in their workforces. | |
| Staff numbers will be cut by 40% compared with the beginning of the year at both firms. | |
| Persimmon and Taylor are also cutting thousands of jobs. | |
| Are you affected by issues covered in this story? Do you work for Barratt? Send us your comments using the form below. | Are you affected by issues covered in this story? Do you work for Barratt? Send us your comments using the form below. |