ONE of the biggest estate agents in Wales, Peter Alan, is to shed its workforce by nearly 10% as a result of the continuing slowdown in the housing market.

The Cardiff headquartered business and subsidiary of Principality Building Society, yesterday confirmed proposals to cut 19 jobs from its 220 headcount, as well as the closure of its Mumbles branch - one of its network of 25 offices in South Wales

Principality chief executive Peter Griffiths said the move was necessary following a decline in the number of house sales over the past six months, which he said had been affected by a combination of the global credit crunch and a fall in confidence in the UK house market.

Mr Griffiths said: "We are talking about unprecedented market conditions and Peter Alan, like everyone else in our sector, is not immune from the credit crunch.

"As a result we have announced proposals for 19 job losses and the closure of our Mumbles branch."

A consultation exercise with staff is expected to be completed next week. Only then will it be know whether any compulsory redundancies will be necessary.

Peter Alan's Mumbles office will be run out of its Swansea branch.

Mr Griffiths said that in the last three months, in line with the sector as a whole, volumes of house sales had fallen, although he declined to give any precise figures.

As well as the impact of the credit crunch, which has created liquidity issues resulting in a reduction in the number of mortgage products of offer, as well as more punitive interest rates, Mr Griffiths said people's confidence in the housing market had been shaken.

He added: "There has also been media hysteria which has resulted in people pulling out of chains because of their nervousness about what the market will do and the availability of credit."

Mr Griffiths forecast that for 2008 average house prices could fall between 5-8%.

However, he stressed that it was not a universal picture and that in some parts of Wales the housing market was performing relatively well.

He added, "We have a long-term commitment to Peter Alan as a branch network around Wales. We have had the business for 20 years. It has done well in the good times and when in testing it has been tested."

The chief executive, who last month was named the Western Mail Business Achiever of the Year, said he believed a correction and not a crash in the housing market was the most likely outcome.

However, he said that if fragile confidence and lack of liquidity in money markets continued into next year, then Peter Alan - along with the wider estate agency sector - would have to review its operational options.

House price figures from the country's biggest mortgage lender Halifax yesterday revealed that values fell by a further 2.4% in May, making the annual drop nearly 4% - the fastest rate of decline since 1993.