London markets dipped today driven by investors pouring out of housebuilders after the UK government signalled it will clamp down on them shunning fixing Britain’s cladding crisis.
The capital’s premier FTSE 100 index closed 0.53 per cent lower at 7,445.25 points, while the mid-cap FTSE 250 index, which is more aligned to the health of the UK economy, plunged 1.50 per cent to finish at 23,001.81 points.
Housing secretary Michael Gove MP today wrote to housebuilders warning he will be “absolutely willing to use legal rules” to force them to remove unsafe cladding from smaller buildings.
Being forced to pay to get rid of dangerous cladding would whack housebuilders’ bottom lines, prompting investors to take flight from the sector.
The likes of Persimmon, Barratt Developments and Taylor Wimpey plunged more than 3.40 per cent each.
Neil Wilson, chief market analyst at Markets.com, said: “UK housebuilders were on the move lower, with the big four all leading the decliners on the FTSE 100… as the government changed its tune on cladding redress, with developers to foot the bill for repairs, which could run to as much as £4bn.”
Meanwhile, on the FTSE 250, fellow housebuilder Redrow was among the worst performers, tumbling 4.49 per cent.
Airlines were a bright spot in the City yesterday, with British Airways owner IAG ranking second on the list of best of performers on the FTSE 100 during opening exchanges. Its shares eventually closed up 1.07 per cent.
Short haul carriers Wizz Air and easyJet climbed 2.32 per cent and 1.93 per cent respectively.
The pound lost ground on the greenback, weakening 0.12 per cent to buy $1.3569.