Just when we thought things were beginning to look up, housebuilder shares uniformly drooped this morning, after retirement home builder McCarthy & Stone presented a gloomy outlook about the impact of Brexit.
Persimmon was the biggest faller among the FTSE 100-listed builders, dropping 2.9 per cent to 1,815p in mid-morning trading. That was followed by Berkeley Group, which fell 2.6 per cent to 2,703p, and Taylor Wimpey, which fell 2.5 per cent to 161.5p. Barratt Developments brought up the rear, falling 2.1 per cent to 489.7p.
(Lest we forget, such has been Berkeley Group’s performance since the Brexit vote, it is set to drop out of the FTSE 100 altogether as part of the index’s quarterly reshuffle).
FTSE 250-listed builders were just as bad: Galliford Try dropped 3.3 per cent to 1,114p, while Bellway fell 2.9 per cent to 2,323p; Bovis fell 2.7 per cent to 890.5p and Countrywide dropped 2.8 per cent to 260.5p.
But by far the biggest faller was McCarthy & Stone itself, whose shares dropped like its eponymous stone, falling 10.7 per cent to 186.65p.
The falls came after the company issued a profit warning today, saying that although legal completions were up 20 per cent in the 12 months to August, since June’s Brexit vote there had been “evidence of some weakness” in the secondary housing market.
Jefferies analyst Anthony Codling suggested government schemes had failed to boost McCarthy & Stone like its rivals.
“Help to Buy is not helping the aged and McCarthy had to help its customers to buy by increasing its sales incentives leading to profits below our expectations,” he said.
“However we remain bullish on McCarthy and Stone, because although the majority of their customers need to sell their home in order to buy, we believe that they may find it easier to sell than they think due to the combination of a shortage of family homes on the market and readily available mortgage finance for home movers. We believe that the current market conditions are very attractive for those thinking about downsizing.”