UPDATE 2-Redrow downbeat on 2009 as home sales plummet

* Says 2009 trading to be 'extremely difficult'

* On target to cut debt to below 225 mln pounds

* Forward home sales to Dec fall 40 percent

* Shares down 5 pct

(Adds CEO and analyst comments, detail, background)

By Catherine Bosley

LONDON, Jan 14 (Reuters) - British housebuilder Redrow Plc (RDW.L) said forward home sales fell 40 percent to the end of December from the previous year and warned margins would decline in what looked set to be an "extremely difficult" 2009.

Chief executive Neil Fitzsimmons said he could not rule out further erosion of house prices in the coming year, and that the company, which cut staff numbers by 40 percent in 2008, would focus on securing cash flow and cutting costs.

Britain's housing market has taken a battering as the credit crunch squeezed bank lending, with prices falling a record 15.9 percent in 2008, according to data from the Nationwide Building Society.