Over 4000 Jobs Gone In A Week - The Housing Industry In Crisis

The British real estate market continues its decline as the market faces job cuts numbering in the thousands right alongside a new report stating that house prices will continue their decline. Persimmon will cut about 1,100 jobs from their formerly strong company. One of the biggest companies involved in house construction now plans to fire 20% of their employees. This will tie up a week of loses in the housing sector that now totals 4,200.

This large number doesn't accurately represent the situation though. It is estimated that many more casual employees on the building sites will be fired without benefits. Persimmon openly claimed that they expect to save £45 million just by reducing the number of casual and full-time staff. Persimmon's stock surprisingly rose by 4% in light of the news. This occurred after a nearly 90% decrease that plagued the company over the last year and a half. Whether this rise will be stable is unsure as news comes that legal completions, sales revenue, and average selling price have all fallen for Persimmon.

Taylor Wimpey and Barratt, two of the remaining four big players in house construction, reported significant declines earlier. They will both be making plans to renegotiate their overwhelming debts while cutting back a combination of 2,200 people. Redrod, another member of the big four, will be planing smaller cutbacks in the amount of 200 redundant positions.

It seems that the market will continue this negative trend. The latest analyses show that housing prices are still falling right alongside drastically decreasing issuance of home loans. The number given out in May fell 44% from last year. Remortgaging is accompanying this trend as the fees involved are too much for home owners as many now opt for a standard lending rate. Arrangement fees never topped £299 in the past, yet it isn't odd today to see rates of £2,000. Just a two-year fixed-rate deal from Halifax will cost the homeowner anywhere from £499 to £1,499 in arrangement costs. This all works as housing prices continue their decline. Average housing prices dropped by about .3% in May while the annual rate of increase fell to a new low at 3.7%.

Barratt will most likely come forward with a new announcement that they've successfully written down the value of their land bank. Taylor Wimpey has already achieveed this by writing down the value of their land bank by £660 million. Persimmon will likely take a similar maneuver in the coming weeks.

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