Redrow and Bovis Homes, the two house-buliders of UK, finally resorted to cutting of 850 jobs and reviewing dividend policies as the property market continued to reel under the worst ever slump.
Redrow is cutting 450 jobs while Bovis Homes is asking 400 of its staff to quit. Nearly 40 per cent of workforce of both the house-buliders will be losing their only means of earning.
The worst slowdown has compelled Bovis to slash its dividend to 5p, down 20p from last year. Redrow has decided to review its dividend policy in order to cope up with dwindling revenues. In the past one week, more than 5,000 people working in Barratt, Persimmon, Taylor Wimpey and other construction companies, lost their jobs.
Bovis and Redrow reported sharp falls in their sales in the first six months of the year. Bovis’s sales were down by 32 per cent and the average price of homes fell to £167,500 from to £187,600. Redrow recorded fall of 19 per cent in sales and average price slumped to £157,000 from £159,900.
Neil Fitzsimmons, Redrow’s chief executive, was surprised at the rapid decline of the market for new and old homes, which according to him, was not experienced for very many years. The Bovis chief executive, David Ritchie, warned that fast emerging trends in the market will make it most difficult to estimate the likely net pricing of the group. Property analysts warned investors of further bad news from house-builders in the next few weeks.
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