Housebuilders suffer second day of share price falls in a row

 
Helen Cahill
Follow Helen
Birling Gap Cottage Begins Demolition Process
Real estate companies have been facing some of the worst after-effects of the Brexit vote (Source: Getty)

Housebuilders are off to a bad start again today as share prices in the UK's biggest property companies are falling for a second day in a row.

Despite announcing a six per cent rise in sales, Persimmon's share price slipped by 3.9 per cent in early morning trading.

Read more: UK property funds could be in for a "bumpy ride" in the months after the Brexit vote

Taylor Wimpey's share price was down by 4.21 per cent, Berkeley Group's by 3.06 per cent and Barratt Developments' by 5.15 per cent.

The falls come after disappointing construction data sparked a sell-off in housebuilders' stocks yesterday.

Meanwhile, Standard Life Investments yesterday suspended trading in its UK property fund following a surge in outflows triggered by the UK's vote to leave the European Union.

Read more: Housebuilders' share prices drop after "dire" construction data

Commercial property companies have also been suffering after Liberum analysts said that the risks surrounding commercial real estate have increased. At the time of writing, Land Securities' share price was down by 5.20 per cent; British Land's share price was down by 4.69 per cent.

By the market close yesterday, British Land and Land Securities were down 7.1 per cent and 5.7 per cent respectively. There was also a sell-off in housebuilding stocks; housebuilders Persimmon, Barratt Developments, and Taylor Wimpey, fell 6.8 per cent, 6.4 per cent, and 6.3 per cent.

Laith Khalaf, Senior Analyst, Hargreaves Lansdown said:

You wouldn’t guess from Persimmon’s results that the company has lost around a third of its value in the last fortnight.

However, that’s because the stock market is looking forward to the next six months and beyond, and the Brexit vote is casting a long shadow over the UK house building sector.

Anthony Codling, equity analyst at Jefferies International, was positive about Persimmon's results today, saying:

Persimmon puts a marker down regarding its cash return strategy. The ten year cash return strategy was structured to accommodate periods of uncertainty that could be expected over such a long term timescale. The group has, in our view, the flexibility, financial strength and landbank length to continue with its cash return plan and we continue to believe that Persimmon’s dividends are strongly underpinned.

Related articles