'No quick fix' as Persimmon confirms 1100 jobs are axed

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Chief executive Mike Farley said the firm has cut about a fifth of its workforce since the start of the year.

It followed 1000 job cuts at rival Barratt Developments and 900 at Taylor Wimpey - with hundreds more expected at the likes of Bovis Homes and Redrow.

In a grim trading update to the City, Persimmon said house sales fell 31% in the first half of the year to 5501 with the average selling price down from £189,255 to £181,500. It left revenues 34% down on last year at £1 billion.

"The first six months of this year have undoubtedly been the most challenging period in Persimmon's recent history," said Farley. "In April, we reported that there had been a further deterioration in market conditions. These poorer market conditions have continued.

"We are in for another 12 to 18 months like this. It is all down to the availability of mortgages. There is no quick fix on this one."

In its key private housing market - a far bigger part of the business than its social housing arm - visitor levels to its developments have fallen 20% and reservations tumbled 45%. Cancellation rates averaged 26% in the first half of this year.

Shares in the housebuilding sector have crashed by around 90% since early last year as the housing boom ground to a halt.

Persimmon shares fell 111/4p to 2161/4p today, leaving it worth just £680 million compared with £4.6 billion in its pomp.

The firm, which owns housebuilding brand Charles Church and bought Westbury for £643 million in 2006, has dramatically scaled back its building plans, and said it is taking "extreme caution" when buying new land.

However, it said it did not expect any significant writedowns on the value of its £2.5 billion land bank.

Farley said it would be in the "tens of millions" as opposed to the hundreds of millions that analysts had been forecasting.