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Homebuilder Barratt Puts London Staff On Notice for Job Cuts

Home-Builder Barratt Puts London Staff On Notice for Job Losses

(Bloomberg) -- Barratt Developments Plc has notified about 5% of its London staff that they may lose their jobs as the company retreats from building expensive apartments in the center of the capital.

Britain’s second-biggest housebuilder by market value is weighing fewer than 20 job cuts in the U.K. capital, according to people with knowledge of the plans. Affected employees have been placed on redundancy consultation, but no firm decisions have been made and there’s no certainty over the total number of positions that will be eliminated, said the people, who asked not to be identified because the plans aren’t public.

A Barratt spokesman declined to comment.

The potential losses come as central London housing is mired in its longest slump in decades. Barratt’s private completions in the high-end market dived more than 64% in the year through June, leaving the firm with just 18 homes to sell in the center, it said last month. By contrast, the number of outer London sales -- which fetched an average 70% less than those in the center -- grew almost 40%.

The job consultations are focused on a single Barratt London division and are not solely a result of the shift out of central London, one of the people said.

A long period of central London home prices surging faster than wages ended in 2014 thanks to tax hikes on luxury home buyers, followed by further increases for landlords and second-home purchasers in 2016. Shortly after, the country’s shock Brexit vote introduced severe political and economic uncertainty that the market has since struggled to shake off.

Barratt now has a strategy to “trade out of central London,” chairman John Allan said in the company’s full-year earnings statement last month.

Still, the U.K. government’s Help to Buy program has propped up demand for cheaper homes that qualify for its interest-free loans. That’s encouraged home builders including Barratt to shift the focus of their London businesses to the city’s outer reaches, where prices are lower.

While Barratt’s completions across all of London rose 3.6% in the year through June, its private sales in the capital still declined by almost 14% in the period.

To contact the reporter on this story: Jack Sidders in London at jsidders@bloomberg.net

To contact the editors responsible for this story: Shelley Robinson at ssmith118@bloomberg.net, Chris Bourke

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