The Bank of England offers no short term relief for housebuilders suffering from the effects of the market slowdown
A bad week for housebuilders continued today with the Bank of England’s decision to hold the interest rate at 5.5%.
The move follows downbeat financial figures from Miller Group, Redrow and Persimmon as a result of the global credit crunch.
Figures from Bovis and Bellway are expected to provide equally gloomy forecasts.
With reservations down by between 20% and 25% at housebuilders in a difficult Q4 of 2007, the interest rate decision was seen as a simple short-term means of buoying sentiment.
Kaupthing analyst Kevin Cammack said: “On balance I’m surprised they didn’t cut it. Although you can sensibly say that because they haven’t cut it now, it is much more likely next month. The critical thing for housebuilders is that they get one by February.”
Earlier this week Miller Group chief executive Keith Miller appealed for a cut in interest rates and the release of extra land by the government to help the sector.