UK housing downturn could cost 100,000 jobs

"The housebuilding industry has a huge multiplier effect on employment and the wider economy," Roger Humber, strategic policy adviser to the House Builders Association, a division of the National Federation of Builders, said.

"If major housebuilders continue to cut around 40 per cent of their workforce ... there will be further losses amongst those employed by thousands of smaller housebuilders," he said.

"(Also,) many more thousands of self-employed tradesmen and sub-contractors, building materials producers, manufacturers of white goods, carpets, curtains, DIY, estate agents, and solicitors will be affected."

Humber said research by Cambridge Econometrics during the last housing recession, when 100,000 fewer houses were built per annum, put total job losses then in the region of 100,000. "We are heading in the same direction again," he said.

Major stockmarket-listed housebuilders have announced around 5,000 jobs cuts in the past fortnight to cope with the deepening depression in the housing market. Some, like Bovis Homes on Wednesday, are cutting 40 percent of their workforce.

Bovis Chief Executive David Ritchie said the downturn had gathered pace in the past few weeks and now felt "an awful lot worse" than the last major correction in the early 1990s.

A 10-year boom in Britain's housing market began slowing last summer before the global credit crunch choked off the supply of cheap and easy money that had helped fuel a tripling of prices in a decade.

Prices have fallen for several months after competition in the mortgage market all but disappeared and availability dried up -- nearly all mortgages now require at least a 10 percent deposit whereas 12 months ago 100 percent loans were common.

On Thursday, HBOS Plc, the country's largest mortgage lender, said the cost of an average home fell 2 percent in June to be 8.7 percent lower on the year, a bigger fall than at any time during the 1990s crash.

Also on Thursday, Austria's Wienerberger, the largest brickmaker in the world, reported a 10 percent drop in its core earnings for the first six months of the year, because of a collapse in British homebuilding.

Housebuilders' share prices have collapsed this year, partly on fears of big write downs on land bought at the peak of the housing market. The mood worsened on June 30 when indebted Taylor Wimpey announced a 660 million pounds write down.

The index of leading housebuilders has fallen by 30 percent in 2008, underperforming the broader stock market by 16 percent in the process.