The housing companies are just cutting their cloth accordingly. They've made significant profits over the last few years as they've ridden the property boom. Now, things are different.
Barratt's massive 'debt' is mainly due to their takeover of Wilson Bowden last year. So although a debt, it is more viewed as investment by the loanees. (think Man U + the Glaziers - massive 'debt' but funded accordingly to make money long term)
Problem with the housebuilders is the thing that everyone calls 'the credit crunch' but no one really knows what it is. A couple of events, news of which spread like wildfire across the globe, causing massive ripples and precautionary actions by many many institutions. Once that 'ball' had started rolling no-one was going to stop it. And, eventually is has crept into all our daily lives in the form of the housing market slump.
These housebuilders could not have predicted it, but my personal view is that should have been more realistic with their future business models. To knee jerk and suddenly start laying off a massive amount of people smacks of panic and (with such huge profits behind them for the previuos years) is a little unsavoury.
They made hay whilst the sun was shining. now they will have to wait for the sun to shine again. In the meantime they will reduce in size, consolidate, merge and re-adjust. But I would be suprised if any of the major players will go bust...but.....
It just saddens me that they were not more sensible with their long term plans.
