Think housebuilders have had a bad year? Well, these analysts think 2017 could be worse.
On the day of the Brexit vote, housebuilders were subjected to some of the most dramatic sell-offs of any stock. None of the big housebuilders have regained the ground they lost on the day.
Liberum analysts said: "Housebuilders' shares look cheap here, but the sector has some obstacles to clear to outperform."
On average, the Liberum lot have cut their target prices for the sector by 10 per cent, "taking a more prudent view of near term risks".
The analysts have listed the seven main risks facing the sector next year:
1. Slowing economic growth
With the risk the Brexit vote will put the brakes on the British economy, many are predicting house prices will fall next year, and fewer homes will be sold.
Liberum have assumed prices could fall by 2.5 per cent and the sales rate will slow by five per cent.
2. Inflation without wage growth
Inflation could be helpful for housebuilders - but only if wages rise at the same time.
Liberum said: "Otherwise, weaker disposable income and rising interest rates would be a difficult combination for the housebuilders and their shares."
3. Housing White Paper
The government's Housing White Paper is due in January, and, unsurprisingly, the aim will be to get more houses built.
And, Liberum analysts think the government will be boosting rental accommodation, favouring small builders. There are also signs the big housebuilders will be forced to develop more quickly.
4. Building cost risks
There's more of a risk of building material costs rising, rather than labour costs.
5. Help to Buy ending
Any curtailment of the scheme would be "harmful" for housebuilders, Liberum warned - but they don't expect it to be cut short (it is due to end in 2021).
6. Financial regulation
Liberum has warned that "financial regulators are watching the housing market more closely than ever" and that any regulation would be a risk to mortgage lending and the the public's purchasing power. But, on the positive side, the market would be less volatile.
7. Mortgage availability
Finally, Liberum said although mortgages are more available now than they were before the EU referendum, falling house prices may lead banks to reduce lending.
"This is likely to be minor, however, unless nominal house prices fall much more than the 2.5 per cent that we expect," they added."