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.
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.
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.
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.