THE developer behind plans for 1,650 new homes in Southampton has become the latest builder forced to make severe cutbacks as a result of the worsening housing market.

Crest Nicholson, which is applying for planning permission for a massive development on the former VT site in Woolston, is to axe ten per cent of its staff, around 80 jobs.

The losses follow south coast based retirement homes specialist McCarthy and Stone's decision to lay off one in ten of its workers to counter effects of the declining market.

It is expected that the majority of staff to leave the firm, which was founded in New Milton and is the largest provider of sheltered homes in the UK, will be from the construction arm because building on new sites has slowed. Staff in architecture, sales and marketing roles will also go, with a total of 110 workers facing the axe.

Chief executive of McCarthy and Stone Howard Phillips said: "Even a well placed company like ours is not immune from current economic pressures."

It's just the latest bad news for a sector reeling from a succession of blows and government figures revealing house-building had slumped 24 per cent to its lowest level in more than a decade.

Persimmon, the country's biggest housebuilder, has said it would stop building on new sites until market conditions improve after sales in the first four months of the year fell 24 per cent.

Barratt Developments, which acquired Ocean Village flat developer Wilson Bowden last year, has also reported difficult market conditions.

David Stubbs, of the Royal Institution of Chartered Surveyors said: "Given the ongoing problems in the mortgage market and a weakening economy, the decline in housing building will surely continue."