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Barratt Developments Shares Under Pressure

The bloodbath of the housing market continued when Barratt Developments was forced to deny rumours that it was in desperate need of funding to stay afloat. While the denial was well received by the market, after the shares had fallen by over 40%, the company refused to rule out a funding request in the short term. Some analysts believe that the group is suffering from debts which are said to be running at around £1.7 billion.

This is the latest nightmare scenario in a housing market which is creaking at the very foundations. When you consider that well known names such as Barratt Developments is struggling then you have to wonder how the rest of the sector is fairing up. Some analysts believe the troubles being experienced have been magnified by the massive prices the companies had been paying for land prior to the credit crunch, many seemingly believing that the boom time in the sector would go on forever.

Normally the sector would be looking to the authorities to reduce interest rates and kick start the economy again, but this is not going to happen in the short to medium term. The sector will undergo a very difficult period of bloodletting and quite who will remain at the end remains to be seen.

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