The dire slump in the housing market was drastically underlined today when one of the UK’s biggest builders Persimmon reported a slump in sales and job losses, and property group Savills revealed a drop in London sales.

York-based Persimmon – which trades as Charles Church, Persimmon Homes and Westbury Partnerships – said the past six months had “undoubtedly been the most challenging period” in its recent history.

Average selling prices had fallen to £181,500 in the first half of the year from £189,255 in the same period last year and sales slumped by 31 per cent.

The beleaguered housebuilder confirmed rumours that it had cut 1,100 jobs – one fifth of its workforce – so far this year.

Persimmon said half-year sales revenues were down by more than a third at £1 billion.

The group’s job losses add to nearly 2,000 job cuts announced last week by rival firms Taylor Wimpey and Barratt Developments.

Persimmon could not comment on whether jobs would be shed in Shropshire as a result of the cuts nationally.

Persimmon is one of the three construction giants involved in the biggest expansion of any town in the UK at Ironstone in Lawley, Telford.

But the companies were forced to slow the multi-million pound development last month, blaming the lack of people buying new homes for the decision.

Savills, meanwhile, reported the drop in London sales below £5 milion and said the downturn had begun to impact on prime country properties.