WITH the credit crunch biting hard, Persimmon Homes may postpone construction work on their new £14 million development in Lanark.
Persimmon are due to build 209 houses and 24 two-bedroom flats at the former St Mary's Hospital site off St Leonard Street.
But with the UK housing market in crisis as buyers struggle to get mortgages from reluctant lenders, this work may be abandoned for the time being.
And this week, Persimmon refused to deny that their St Mary's development plans face being ditched.
A Persimmon spokesperson told the Gazette: "During the current economic climate, it is prudent business practice to regularly review all aspects of our operations on a region by region basis.
"To this effect, advice from the Group board was circulated this week, in particular requesting all offices to re-evaluate work in progress and concentrate on progressing sold and contracted plots until the mortgage market and availability of credit for house purchasers improves.
"In making sure that our business is in step with slower housing market conditions, we will therefore maintain a strong position.
"We cannot at this stage predict the number of forthcoming sites this review will affect, but we believe it will be minimal across West Scotland.
"It is very much business as usual around the country for Persimmon and, in the West Scotland region alone, we have 15 developments, which are open as normal and ready to welcome our valued customers."
Like other UK housing developers, Persimmon have suffered recently.
The company's Scottish chairman John Cassie last week presented a grim picture of the UK housing market.
Britain's biggest housebuilder by market value said its sales so far in 2008 were down 24 per cent year on year to £1.37bn, and volumes were down by 18 per cent as the credit crunch bit deeper. The company added that it had postponed construction on several new sites, including some in Scotland.
However, Persimmon insist the situation in Scotland for the time being is not as bad as in England and Wales, as there still is strong demand in this country for the company's traditional, two-storey family dwellings.
Over the past month, Persimmon has stated that uprecedented tightening in the mortgage market has caused a further deterioration of the housing market, leading to lower sales volumes and increased cancellation rates.
The UK housing market, which enjoyed a boom stretching back to the mid-1990s that saw many valuations more than treble in price, had been slowing before the global credit squeeze began last summer.
The St Mary's land has been empty since the hospital controversially closed in late March 2002. The buildings were demolished virtually immediately and the site cleared.
Run by the Sisters of Charity of St Vincent de Paul, St Mary's Hospital provided almost 130 years of care for the community, mostly for elderly patients.