Unemployment hits 11 year high as mortgage market cripples housing industry

13 November 2008 / by None
Unemployment in the UK has hit 5.8 per cent, a new survey from the Office for National Statistics has revealed. The number of Brits who were unemployed reached 1.82 million in September, the highest since December 1997

The news comes amid constant reports of job cuts, BT and Virgin being the latest to announce that redundancies are necessary to keep them afloat. And, according to the Bank of England's Inflation Report released yesterday, things will get worse before they get better.

So far, the housing sector has been one of the hardest hit as, according to home builder Taylor Wimpey, third quarter mortgage approvals fell by 70 per cent year on year this year.

House builders like Taylor Wimpey and Persimmon have already announced job cuts this year and, as prospective home buyers find they are unable to fund a new home; builders are receiving a further blow in the form of cancellations.

Taylor Wimpey's Interim management Statement said: "Net reservations for the second half to date average 165 per week, around 27 per cent below the second half of 2007.

"These net reservation rates include the impact of cancellations, which have continued to run above normal levels in the second half of the year."

As home builders cut back, brick makers are also beginning to suffer as, HeidelbergCement, owner of Hanson, has revealed cost cuts, reported to be in the form of Hanson plant closures across the UK, with consequent job losses estimated to be around 600.

Meanwhile, as the demand for new homes continues to fall as Brits make do with what they have, estate agents are also feeling the pinch. Commenting on the market, which is now affecting even the best properties, director at Savills residential research, Lucian Cook, said:

"Blighted properties have become virtually unsaleable in many cases, sellers remain unwilling to take such a large hit on values and buyers don't feel that they need to compromise."

And, as house sales come to a stand still, so too do the profits of estate agents, sparking fear in the industry for the future of thousands of jobs. In fact, according to The Times today, 15,000 estate agent jobs are currently under threat.

Commenting on the ONS statistics, general secretary at the Trades Union Congress (TUC), Brendan Barber, said yesterday: "These are dire figures. High unemployment is going to be with us for some time now.

"More than 1,500 a day are now finding themselves unemployed through no fault of their own. And as today's figures show, they face a long hard struggle to get a new job."

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