Housebuilder share prices fall 6% amid global turmoil

Fall in sector’s share value is the first in nearly two years as global uncertainty and Brexit fears spook investors.

The share value of the UK housebuilding sector slumped by 6% in the first quarter of 2016 - the first fall in nearly two years - as a cocktail of global risks spooked investors.

Redrow, Abbey, Telford, Berkeley and Barratt suffered most, each posting double-digit falls since the final quarter of 2015, according to the latest data from analyst Building Value.

Berkeley, which has been shorted by a clutch of hedge funds, lost 12.7% in value, and only MJ Gleeson (13.8%), Persimmon (2.9%) and Crest Nicholson (1.1%) saw increases in their share prices.

The upshot was that the sector shed £2.1bn overall in the first quarter, having hit an all-time high of £33.3bn at the end of 2015.

The 6% fall marks the first time it has entered negative territory since the second quarter of 2014.

Tony Williams, Building Value chief executive, said the sector had been hit by global market turbulence, such as fears over the health of the Chinese economy and ongoing impact of the fall in the oil price.

“Growing concerns over a possible UK exit from the EU were also having an effect. It is the uncertainty generated by the journey to polling day that is actually worse than either result,” he said.

“In one day, for example, in February the housebuilding sector fell 6% - purely on Brexit fears. On a brighter note, interest rates are now expected to stay lower for longer, new housing volumes are up and the government’s Help to Buy scheme is working.”

Housebuilding was not the only sector to suffer in the first quarter, added Williams, citing falls in the wider construction and real estate sectors as well as other UK equities.

The FTSE 100 was the top performer, slipping just 1% in value compared with the previous quarter.

The year-on-year comparison was more favourable - all but Telford posted strong growth in values, with MJ Gleeson, Bellway, Crest Nicholson and Persimmon leading the way.

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