Investors fled the stocks on worries that house sales, and seven per cent annual price growth, could vanish once the Bank of England governor puts the brakes on incentives for banks that offer mortgages.
However, the industry appeared hopeful that the underlying demand for homes will endure even after FfL moves over to support small businesses.
“I don’t think there will be a fall [in house sales],” Taylor Wimpey boss Pete Redfern told City A.M. “The bit that’s unknowable is exactly what is driving bank lending. But I don’t think the man in the street is going to look at this when deciding whether to buy a house – they’ll buy a house because they want to buy a house.”
While housing firms were taken by surprise by the timing of Carney’s move, many think the money markets are healthy enough to continue supplying mortgages.
“[T]he Help to Buy equity loan scheme is now in place and is driving sales and stimulating higher levels of house building,” said the Home Builders Federation.