Bovis Homes today announced that it was cutting an extra 200 jobs and will scrap its final dividend to cope with a steep downturn in the UK housing market.

The housebuilder revealed plans to cut a total of 600 staff from its 1000-strong workforce as it struggles to maintain profitability. Shares in Bovis fell 2.25p to 442.5p.

The company had already announced plans to cut 400 of these jobs last July, but said trading conditions in the UK housebuilding sector during 2008 were the "worst seen in many years".

"Accordingly, the group's priorities over the short term are to maintain its strong balance sheet capability to weather current market conditions in an orderly fashion and be well positioned for any market upturn," a statement said.

The group also said the outlook for the year ahead appeared “challenging at present" but said, following the cost-cutting measures, pre-tax profits would be in line with expectations.

Bovis also said it was cutting its overheads by more than expected and that costs this year would be 40-50 per cent of the 2007 level.

Last month the group succesfully renewed a £220 million lending facility.

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