Persimmon share price dips in wake of Help to Buy contract fears
Persimmon was among the biggest FTSE 100 market fallers this evening as fears that the property giant could lose its Help to Buy contract weighed on investor confidence.
The developer will be hoping to claw back positive sentiment in the City tomorrow in its full-year profit results, after shares closed down nearly five per cent today.
Housebuilding stocks proved to be one of today's biggest drags on the FTSE as property peers such as Taylor Wimpey and Barratt Developments also suffered slight losses on the news.
Caution in the City comes after weekend news that Persimmon might lose its Help to Buy government contract, with housing minister James Brokenshire reportedly taking an interest in the company’s business practices.
One source told Reuters that Brokenshire is "increasingly concerned" over the behaviour of the developer, raising issues over leasehold, build quality and accountability.
Read more: Is Persimmon’s success built on solid ground?
The housebuilder, which has been one of the biggest beneficiaries of the Help to Buy scheme designed to help first-time buyers onto the property ladder, has suffered a backlash in recent months following a £75m pay packet for the group’s former boss Jeff Fairburn.
AJ Bell’s investment director Russ Mould said: "The poisoned legacy of the frankly astonishing £75m pay award to its former chief executive Jeff Fairburn continues to haunt housebuilder Persimmon if weekend press reports are any guide…If these rumours prove accurate it would be a damaging blow for the company given that around 50 per cent of the homes it built in 2018 were sold through the scheme."