The credit ratings of housebuilders could fall as a result of the economic downturn, a leading ratings agency has predicted.
The warning came from Fitch Ratings after it said it was likely to drop its grade for Taylor Wimpey, given the company’s exposure to the US housing market.
The ratings are designed for long-term investors such as pension funds and take companies’ overall solvency into account. Taylor Wimpey’s BBB rating is two ranks above the “non-investment” grade, a level which might make organisations reluctant to invest.
Fitch rates companies on request. Ewan Macaulay, a Fitch analyst, said: “Our rating reflects the broader market. The sector is under pressure and many may find it difficult to get credit.”