Housebuilders’ problems could be bad for economy

Housebuilder Barratt Developments, already cutting over 1,000 jobs, has reported a major fall in annual profits – down 68% from a year ago. It’s a bad sign for everyone in the building industry, particularly those already struggling to manage their debts.

Falling profits for housebuilders may come as no surprise, given the problems in the housing and mortgage markets, but the problems don’t end there.

“It’s simple maths,” said a spokesperson for debt management company Gregory Pennington. “Unemployed builders don’t have as much money to spend as employed builders, so the effects will be felt everywhere they normally spend money, from supermarkets to cinemas and car showrooms.”

The threat of unemployment (or even reduced income) may be especially distressing to people with high levels of personal debt. “People who commit much of their disposable income to debt repayments are likely to find it particularly difficult to manage if their income drops. We would advise them to seek professional debt advice without delay,” the debt management company spokesperson concluded.

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Debt management company Gregory Pennington provides free debt advice and a wide range of debt solutions.