The Bank of England’s announcement that approvals of home loans had fallen to the lowest level for two years, and Hometrack’s survey showing that house prices had dropped for the first time in two years, sent housebuilders’ shares south.
Taylor Wimpey plunged more than 3.6% within minutes of the news, Barratt slipped 3% and Persimmon, Bovis Homes and Bellway also fell.
It seems only a cut in interest rates before Christmas could boost the sector but that is unlikely. The strength of mortgage lending and a fresh rise in credit card borrowing may convince the Bank to delay cutting rates until next year.
Meanwhile, Kier’s shares went up. Carillion rose too, although this failed to redress the fall it suffered when its courtship of Alfred McAlpine was revealed last month.
With oil prices rising and economic storms looming, it seems that construction is starting to look like a safe haven to some…