Redrow axing 40 pct of jobs

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Redrow axing 40 pct of jobs

09/07/2008 09:05

LONDON (Reuters) - House builder Redrow said its 2007-08 trading results would meet forecasts but it was cutting 40 percent of its workforce and was set to significantly reduce the value of its land holdings.

"The UK housing market continues to be severely affected by the credit squeeze. Homebuyer confidence is now also being influenced by concerns about the future for house prices and interest rates," Redrow said, adding reservations in the six months to end-June were down 55 percent.

"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."

Redrow said in a statement on Wednesday it sold 3,925 homes in the year to end-June, down 19 percent on 2006-07. The average selling price fell 2 percent to 157,000 pounds.

A 10-year boom in the housing market began slowing last summer before the global credit crunch choked off the supply of cheap and easy money that had helped triple prices in a decade.

Prices have fallen for several months as competition in the mortgage market all but disappeared and availability dried up.

House builders’ share prices have collapsed this year, partly on fears of big writedowns on land bought at the peak of the housing market.

Redrow shares, which peaked at 737 pence in January 2007, closed at 96.25 pence on Tuesday to value the company at 158 million pounds.

(Reporting by Dan Lalor; editing by Sue Thomas)

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