Redrow sees revenues fall by nearly 60 percent
A leading house builder in the UK has revealed that revenues have fallen by almost 60 percent as the mortgage crisis in the UK continues. In the last twelve months house builder Redrow has seen revenues plunge by more than half with a drop of 58 percent.
With the financial crisis continuing to wreak havoc in the UK mortgage lending has become increasingly constricted, and this has had a huge impact on the sale of new properties.
In 2007 the building company enjoyed healthy revenues of £353 million. However, in 2008 the revenue levels fell by more than half, plunging to £149.5 million.
Officials from the firm have said that the reason behind the huge drop in revenue is the decline in sales, partly fuelled by lack of mortgage lending, and a drop in property values. In the twelve months to December of last year the company was forced to cut its workforce by 43 percent, and now has just seven hundred and forty employees.
Many other house builders have also seen revenue levels drop, as all have seen property sales slide amidst tighter mortgage lending conditions, falling property values, and increased wariness amongst struggling consumers. The situation is set to get worse, as the recession has now hit, and Redrow has already confirmed that it is looking to cut another ninety jobs over the course of this year.
An official from Redrow said: “Redrow responded early to the unprecedented market conditions, taking swift and decisive action within the business. We have implemented a major cost reduction programme which is delivering significant savings and we are executing tight control of our cash flows. In both these areas we are ahead of our plan.”
He added: “Our strategy in the medium term remains focused on the strength of our forward land bank and the delivery of a differential product to our customers.”
Related Posts
Slight drop in house prices in UK
Over recent months there have been modest increases in property values in the UK, and this has sparked renewed hope across the nation, with many industry officials claiming that the property price increases were signs of green shoots in the property market and the economy as a whole. However, a number of other industry experts were quick to predict that the property price increases were only a temporary blip and that the situation would not be sustained.»
House builders have to slash jobs
A couple of high profile, well known house builders have recently had to slash their workforce by around 40% as a result of the housing market, which has all but ground to a halt due to lack of property sales and plummeting house prices. Property sales have now plummeted because many people are unable to get a mortgage in the current financial climate, with lenders tightening up on their lending criteria, and many others do not want to buy property in case the value continues to fall.»
Continued rise in property sales
There has been a continued increase in the number of properties being sold in the UK according to recently released figures from HM Revenue and Customs. »
June saw fall in property prices
According to recently released figures there was a drop in property prices for the month of June, following four months of price increases. »
Sales of properties reach highest levels in two years
The sale of properties in the UK have reached their highest levels in two years according to recent reports, and this comes after a turbulent period during which the sale of properties all but came to a halt, with faltering prices resulting in homeowners being reluctant to sell and the mortgage drought resulting in would be buyers unable to purchase a property. Officials believe that the increase in sales is yet another sign that the property market in the UK is on its way to recovery.»