[ad_1]
Major housebuilders’ shares tumbled in early trading after Crest Nicholson (CREST) slashed its profit guidance because of a worsening outlook for the housing market. Consensus forecasts were for an underlying pre-tax profit of £72mn for the year to 31 October, but the company said this morning it now expects that number to be “around £50mn” due to weaker than expected sales.
“Against a backdrop of persistently high inflation and rising interest rates, trading conditions for the housing market have worsened during the summer of this year,” the company said.
Crest Nicholson’s shares plummeted 13 per cent following the announcement to 167p, before rebounding to 182p. Its peers Taylor Wimpey (TW.), Persimmon (PSN), Barratt Developments (BDEV), and Berkeley Group (BKG) were the worst-performing shares in the FTSE 100 this morning, with drops of between 2 and 4 per cent. Meanwhile, FTSE 250 housebuilders Redrow (RDW) and Vistry (VTY) fell by 5 and 3 per cent, respectively. Online estate agency Rightmove (RMV) was also down 2 per cent. ML
Sharpest drop in UK home asking prices since 2018
The average asking price of a UK home fell by 1.9 per cent, the biggest drop in five years, according to Rightmove. The company said the drop showed sellers have begun to accept that higher interest rates have slashed buyers’ budgets. From December to May, asking prices continued to rise even as other indexes showed house prices were falling, suggesting that many sellers were overvaluing their homes.
“Our analysis shows that homes that are priced right the first time, rather than priced too high only to be reduced later, are not only more likely to find a buyer, but more likely to find a buyer quickly,” said Rightmove director Tim Bannister. ML
Read more: Will falling inflation boost property prices?
EPIC in ‘advanced negotiations’ with major US Reit
Ediston Property Investment Company (EPIC) said it was in “advanced negotiations” with the US-listed Realty Income (US:O) about selling its property portfolio to the American company. The UK-based real estate investment trust (Reit) confirmed the news late on Friday after property website React News reported on Wednesday that Realty Income was the likely buyer. Shares rose 6 per cent over last week.
“The board reiterates that there can be no certainty at this time that a sale of the Company’s property portfolio will take place; nor as to the final terms on which, or the price at which, any such sale might be undertaken,” EPIC said. ML
[ad_2]
Source link