For the past decade, housebuilders have prospered. As they move into a downturn, the real test of management at Persimmon and its peers will be how they cope when they no longer have a licence to print money.

Persimmon, which announced this morning that it will cut 2,000 full and part-time jobs, is often tipped to do better than most. It has shifted its focus to more affordable housing, which should help it in the lean years to come with the Government allocating £8.4 billion to building such houses. This morning, its share price only fell by 2.5 per cent while its peers Taylor Wimpey and Barratt fell by 9 per cent.

This is cold comfort for a company whose share price has plunged by almost 90 per cent in the past 18 months, and now has a market capitalisation worth around a fifth of the value of its land bank. Its results are dire by any standards - legal completions down 31 per cent, average selling price down 4 per cent and, most importantly, sales revenue down 34 per cent to around £1 billion. Cutting jobs and refocusing the company should help it survive, but its share price may have even further to fall.

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