May 21 (Bloomberg) -- U.K. homebuilders will cut tens of thousands of jobs as the 19 billion-pound ($37 billion) industry grapples with the worst housing slump in more than a decade, according to the chairman of the Home Builders Federation.

``There isn't a builder in the land who isn't considering overheads and job losses,'' Stewart Baseley said in an interview yesterday. Job losses ``will be in the tens of thousands,'' he said. ``I've never seen a downturn escalate as quickly as this.''

Taylor Wimpey Plc, Britain's biggest homebuilder, may eliminate 600 jobs and Persimmon Plc, the second-largest, has postponed work on new developments after the seizure in global credit markets prompted lenders to withdraw some mortgages. House prices fell in April from a year earlier, the first annual decline since 1996, according to Nationwide Building Society. The industry employs about 300,000 people including subcontractors.

Homebuilding stocks have tumbled by more than 50 percent since spiraling subprime mortgage losses sparked a global tightening in credit markets. Both Taylor Wimpey and Bellway Plc were reduced to ``sell'' on May 16 by analysts at Goldman Sachs, which predicted more ``negative news flow on credit availability, mortgage lending, home pricing, and trading'' during the summer months. That followed a similar downgrade of Bovis Homes Group Plc at Merrill Lynch & Co.

Taylor Wimpey, based in London, declined 5.8 percent to 104.75 pence in the U.K. capital today. Bellway fell 3.9 percent to 645.5 pence.

`Unique' Slump

The current housing slump is ``unique,'' because it's been caused by fewer loan approvals rather than spiraling unemployment or inflated borrowing rates, Baseley said. The number of mortgages granted dropped to a record low in March, almost half the level of the previous year and the lowest since the Bankers Association started keeping records in 1997.

``The data is one way at the moment,'' Baseley said.

The government should abolish the housing sales tax, known as stamp duty, for some first-time buyers or those limited to small deposits, he said.

Redrow Plc on May 13 said it has stepped up headcount reductions in the last few months and Barratt Developments Plc forecast a day later its number of new developments will decline. Taylor Wimpey may close one-third of its regional offices, according to a company official.

Overall, about 75,000 fewer workers will be needed in the industry, given homebuilders' volumes are down about 25 percent, said Mark Hughes, an analyst at Panmure Gordon & Co.

Unemployment Rising

Cuts to the workforce will hurt all regions of the country and will affect related industries too, from building-material suppliers to lawyers and removal men, Baseley said.

Wolseley Plc, the world's biggest distributor of plumbing and heating equipment, has a hiring freeze in place after cutting 400 jobs in the U.K. during the second half of last year.

``There has been a more pronounced slowdown in the U.K. over recent weeks,'' Steve Webster, finance director at the Reading- based supplier of pipes, said on a call today.

Any reductions will also add to pressure on national unemployment levels, threatening consumer spending and economic growth. The jobless rate rose in April for a third month as the deepening economic slowdown led companies to eliminate workers.

Migrant Workers

Moreover, a majority of construction workers jettisoned by the homebuilding industry will struggle to find work in commercial building or office interiors because those markets are also struggling, Panmure's Hughes said.

A decade of booming house prices, coupled with TV programs such as ``Location, Location, Location'' aimed at amateur property developers, has spurred construction growth and attracted plumbers and other skilled workers from eastern Europe. Three-quarters of the job losses will involve those immigrants, said Hughes. The pound has lost 25 percent of its value against the Polish zloty since August last year, adding to the push factors.

``It's the natural attrition of migration,'' the Panmure analyst said. ``There is now less work in the U.K., the pound is weaker and wage inflation in countries like Poland is at double digit levels, so elements of the reasons for them coming here are fading.'' he said.

To contact the reporter on this story: Tim Barwell in London on tbarwell@bloomberg.net

Last Updated: May 21, 2008 11:43 EDT