As the boss of one of the major housebuilders put it last week: “It’s shit out there and getting shittier by the day and there’s no sign of when the shit is going to lift.”
The four housebuilders that gave trading updates this week were slightly less candid. Persimmon kicked things off with a statement that was not as apocalyptic as some had feared, although one analyst said the fact it was less than upfront about the level of redundancies it was planning (2,000) showed a worrying lack of frankness.
It was followed on Wednesday by Bovis Homes and Redrow. Bovis’ shares went down in early trading, but Redrow’s went up. That rather surprising outcome may be explained by the City’s reaction to Redrow’s announcement that it was in talks with its banks about relaxing its lending covenants. Perhaps it pays to be highly geared after all. Barratt completed the quartet yesterday.
Look away now if you bought £100 of housebuilding shares this time last year. If you plumped for Taylor Wimpey, they’d be worth £8, Redrow £21, Bovis Homes £38, Barratt £4, Persimmon £21, Berkeley £36 and Bellway £32. Ouch.