The housebuilding sector was hit again this morning as Redrow and Bovis Homes slashed close to 1,000 jobs and said their business had decreased dramatically.

These job cuts bring the total job losses in the housebuilding sector to 5,500 this year. The true figure is thought to be even higher as this does not include many casual staff on building sites.

Redrow, one of the UK's big four housebuilders, said sales in the second half of the financial year were less than half the levels achieved last year. The company is cutting 40 per cent of its headcount – around 550 people in total - and closing two offices. It is also set to announce a “significant” writedown in the value of its land bank at its annual results in September.

Chief executive Neil Fitzsimmons said consumers’ lack of confidence is now having a bigger impact on sales than difficulties in getting a mortgage.

Rival Bovis reported a 32 per cent decline in completions in the "worst market backdrop" it had seen for many years and said 40 per cent of its staff, equal to about 400 jobs . It has slashed its dividend from 20p to 5p and warned that its first-half profit will be hit by a sharp reduction in sales volume, with a gross housing profit margin of 26 per cent expected for the first half, down 6 per cent from last year.

Housebuilders’ share prices have plummeted this year, partly on fears of big writedowns on land bought at the peak of the housing boom.

Sales at both Redrow and Bovis were down as customers failed to secure mortgages. Bovis said that its advance sales to the end of June, to be completed by the end of the year, had declined by 35 per cent to 1,482 homes. Redrow’s advance sales virtually halved from 2,148 at the same time last year to 1,189 this year.

Average prices for new houses at both companies were down. Bovis, which has increased its exposure to social housing, saw its average house price fall from £189,600 in the first half of 2007 to £167,500 in the first half of 2008. The average price of a new Redrow home dropped from £159,900 to £157,000.

Bovis is closing its eastern regional office, and transferring control of its operation in this area to its central and south-east offices. It is also amalgamating some of its northern region with its central region, and expects a one-off restructuring charge of around £2 million.

Redrow management said: “The UK housing market continues to be severely affected by the credit squeeze. Homebuyer confidence is now also being influenced by concerns about the future for house prices and interest rates. As a result the market for both new and second hand homes has declined rapidly to transaction levels not experienced for very many years with the price of homes now declining.”

Further evidence of the sharp downturn in the commercial property market was seen in DTZ's results. The surveying company's pre-tax profits fell by 46 per cent to £20.8 million for the year to end of April. DTZ reduced its full-year dividend to 6.5p a share, compared with 11.5p last year, because of uncertain markets, and was also forced to take an impairment charge of £11.7 million relating to investments in North America.

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