Housebuilder Barratt Developments has confirmed it will axe 1,200 jobs due to the slump in the property market.

The group plans to close two divisions and it will also merge eight divisions into four, under plans to cut yearly costs by approximately £40 million.

Average private sales rates in the second half were 42.9% down on a year earlier and 13.5% lower than the first half.

Mark Clare, Group Chief Executive commented: "In terms of housing volumes, margins and debt, we have delivered a satisfactory performance in an intensely difficult market. By enhancing our sales capability, reducing our costs, and agreeing a new financial package, we have now substantially improved our competitive position and are better placed to deal with what will be a very challenging period ahead."


The group is reducing investment levels to reflect current market demand by reducing work-in-progress and stock levels, whilst severely constraining investment in new land.

Mr Clare concluded: "With the new financing package now in place, and the focus on de-leveraging the business, we believe we now have the structure to enable us to deliver through today's challenging market.

"Although housing production is expected to reach its lowest levels for more than 50 years, we continue to believe that in the longer term, the imbalance between supply and demand will drive future growth for the UK housebuilding industry, and more stable pricing."

(CD/JM)