Housebuilder responds to market collapse as reservations fall 55% over past six months

Redrow has announced it is closing two offices and cutting 40% of its workforce.

Redrow, which is consulting its 1372 workers about the 550 redundancies, said the market had deteriorated significantly in recent weeks as potential buyers struggled to secure mortgages.

Reservations fell 55% in the six months to 30 June 2008, while cancellations increased to 30% – compared with 18% for the same period a year earlier.

Sales for the full financial year fell 18% to 3,925 while the average selling price dropped slightly to £157,000.

In a gloomy outlook, Redrow said it expects the "difficult markets" to persist for some time.