Redrow, the UK house builder, forced to cut jobs

Posted under General by Michael

Redrow, the UK house builder, has been forced to cut jobs owing to the big slump in the market. They see further worsening of the situation even in the peak spring selling period. Sales of homes have fallen more than what company had predicted. The prices also crashed beyond prediction. Company’s gross margins have been badly affected since beginning of January. The shortfall is being partly offset by cutting number of jobs and introducing other measures to cut the costs.

Redrow is holding squeeze on mortgages as the major reason for deterioration of housing market. It points out that slump in reservations is more than 50% when compared to same period last year.

20% is the normal rate of cancellation of reservations in the market. But the situation is heading for worse. Cancellation rate is on rise since Easter. Reservations and cancellations are fluctuating beyond estimates making it absolutely difficult to predict changes accurately. Redrow is still trying to assess how long the slump will last and how much further the house prices will fall. They intend to take all measures to generate value for its shareholders

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