The mortgage market in the UK could be put under further financial strain by recently-announced troubles at some of the UK's biggest new home builders.
Earlier today, Barratt Developments said that it would cut around 1,000 employees and close its offices in Chester and Sheffield. Barratt had been under particular financial pressure due to its takeover of rivals Wilson Bowden prior to the beginning of the credit crunch last year, which loaded around £1.7 billion of extra debt on to the company.
This meant that, when the credit markets seized up with the onset of the financial crisis last summer, Barratt found itself facing severe difficulties with raising revenue - making the job cuts more likely.
The announcement follows news of 900 workers at construction firm Taylor Wimpey, which came yesterday. The firm also indicated that 13 offices will be closed due to the downsizing.
Should the credit crisis continue and further job losses are registered in the sector, it is likely that the number of new properties coming on stream will be dented by the job losses. This could have a long-term impact on the property market as a whole, due to the consequent rise in demand that this shortage would produce making house prices, and the size of mortgages, still larger than they would be otherwise.
Commenting on the announcement, a Barratt spokesman said: "Our number one priority is to ensure that Barratt's core skills are retained."
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