It seems perfectly prudent to raise interest rates gradually so that the housing market is cooled down gently. Yet, for some reason known only to them, the chaps and chapettes in the City have convinced themselves that an extra 10 quid a month on a mortgage is going to put people off buying a new house. Pardon my French, but that is pure balderdash …
So let's go through some of last week's victims: Barratt dropped 1.5% to 607p; Bovis Homes saw 5.2% lopped off to close at 517.5p; Taylor Woodrow slid 1.3% to 278.25p; Crest Nicholson slipped 1.6% to 345p; and Wilson Bowden fell 3.6% to 1060p.
Another housebuilder to take a bit of a dive was Westbury. By close of play Friday it stood at 438p, a fall of 3.1% over the week. Perhaps this slide is a little less surprising than those of its peers. After all, just a week earlier chief executive Martin Donohue rubbished claims that it was set to be gobbled up by Persimmon. Clearly green-eyed Square Mile pundits have taken the hint and have decided that this latest consolidation rumour has little substance to it.
Now the McAlpines have called a truce, take a punt on Alf
Hunch of the week
Donohue's denial also seemed to do Persimmon little good, with the country's biggest housebuilder also enduring a tough week that ended in a 2.6% fall to 639p.
Even outside of housebuilding there was little cheer. Contractor Amec was forced to admit in a statement that it could not estimate how much cash it would see out of its Iraq contracts this year. The security situation makes such predictions pretty much "pin-the-tail-on-the-donkey" affairs. Unsurprisingly, Amec's share price took a hit, falling 6% to 284.25p.