Homebuilders under pressure after Bank of England announces plans to cool down house market
The Bank of England’s stunning move to clamp down on rising house prices sent shockwaves through the City’s listed housebuilders, wiping more than one billion pounds off the sector as panicking investors dumped the shares.
Persimmon, Britain’s largest builder by market value, immediately plunged to the bottom of the FTSE 100 index, shedding 7 per cent, or 44p, to 1201.5p.
Barratt Developments took an even bigger hammering, losing 33.2p to 314.5p, a fall of more than 9 per cent. The carnage continued as Berkeley Group dropped 106p to 2325p, or 4per cent.
http://www.independent.co.uk/news/business/news/homebuilders-under-pressure-after-bank-of-england-announces-plans-to-cool-down-house-market-8969664.html
This isn't welcome news. There's every possibility that the move by the Bank of England to put a stop to the help-to-buy scheme will have a knock-on effect to the landscape industry.
Not only will there now not be the money available for landscaping new-build gardens but there won't also be the liquidity in the housing market in general.
The only hope, I guess, will be the 'don't move, improve, market.
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I saw this on the news yesterday. I understand the reasoning behind why it was done but on the other hand it makes the original policy (which was to try and stimulate the housing market) look amateurish and poorly thought out. As Phil says, there will be a knock on effect to the landscaping companies who work on new build developments. Additionally there will be a huge negative effect on builders, bricklayers, plumbers, joiners and all the other associated trades who absolutely rely on a robust and strong house building market. My father in law runs a plumbing firm who work on these new developments and he has seen the market really improving over the past 2 years. What a shame for all these businesses who were seeing green shoots in the economy to now hear that the policies that aided this recovery have been shelved.
On the bright side the bank of England now say they are going to put their focus into small business. Hopefully, they can have the same impact with small business as they did on the housing market. Lets just hope that unlike the housing market what they do is sustainable and small business doesn't get the rug ripped out from underneath it like what happened to the housing market yesterday
no point loaning money to small businesses if the new builds will grind to a halt all that will do is flood domestic market with tradesman desperate for work there cant be growth without construction work if the new builds stop there will be many thousands looking for work and this could be a step back into the red for everyone
if anything they need to add more new builds there is already a shortage of houses the only way to reduce house prices is to build lots of capped priced cheap housing and put tougher restrictions on buy to lets on new build properties or limit only to housing association and first time buyers