Persimmon axes 1,100 jobs

Persimmon, one of the UK's biggest housebuilders has today announced that it has cut about a fifth of its workforce as it struggles with the worst slump in the housing market for 30 years.It said that sales were down 31% in the past six months as it confirmed it has cut 1,100 jobs since the start of the year.

Persimmon said that the job cuts would save about £65m per year, meaning it could cope "efficiently" with its downturn in business.

In a trading statement for the six months to June, which Persimmon described as "the most challenging period in its recent history", it blamed "the reduced availability of mortgage funds and a reduction in consumer confidence" for the slump in interim sales to £1 billion.

The group added that average selling prices had fallen to £181,500 in the first half of the year from £189,255 in the same period last year.

Persimmon's forward order book is 30% down year-on-year at £650m, and its land bank has fallen by 7.5% 76,000 plots.

Housebuilders have been hit hard by the credit crunch as the mortgage drought has meant homebuyers have been unable to secure the finance they need, while the fall in property prices have put people off buying a home.

Last week, Taylor Wimpey shares more than halved in value after the firm announced 900 job cuts and said it had failed to secure an extra £500m of funding while Barratt is to cut up to 1,000 jobs.