Finance and Insurance

As most people are only too aware the mortgage and housing sectors in the UK have been going through turmoil over recent months, since the onset of the global credit crunch and its repercussions. As a result of the situation, mortgage loans have become far more difficult to come by and properties have become far more difficult to sell, leaving industry officials such as estate agents and property developers, as well as other related industry officials, facing severe problems.

Two housing development companies that were recently forced to slash around 40% of their workforce due to poor sales performance are Redrow and Bovis Homes. Both have seen sales figures slump, and the poor performance in the housing sector has meant that both have had to dramatically cut back on the number of employees.

The chief executive of Redrow recently stated: ‘It remains difficult to assess how long the sharp reduction in sales activity will continue or the extent to which house prices will be affected. However, we expect the difficult markets we are confronting may persist for some time.’

He added: ‘The housing market continues to be severely affected by the credit cards squeeze. Homebuyer confidence is now also being influenced by concerns about the future for house prices and interest rates. As a result, the market for both new and second-hand homes has declined rapidly to transaction levels not experienced for very many years with the price of homes now declining.’

The chief executive from Bovis stated: ‘The backdrop to the market is pretty awful. The volumes have been affected by that backdrop, which has largely been caused by the turmoil in the financial markets, and the inability to get a mortgage has been a massive constraint on the consumer.’