A subdivision of Taylor Wimpey, the troubled housebuilder, has told its subcontractors that they must cut costs on all existing orders by 20%.

The demand is the most extreme example yet of how the scramble to cut costs by house builders is squeezing companies further down the supply chain. A letter from Taylor Wimpey subsidiary George Wimpey Bristol warned: 'Unless this situation is taken extremely seriously and acted upon swiftly there is every possibility that sites will grind to a halt.'

'Never have the consequences of a lack of your cooperation been as potentially detrimental to our build and possibly like other developers, our very survival!'

The letter asks subcontractors to respond by 19 January with the details of any reductions they can make, adding that success or failure in the current environment was determined by 'survival of the fittest'.

Financial Times