Investor jitters continue as concern mounts for housing schemes and housebuying activity
The growing coronavirus crisis wreaked further havoc on the shares of listed housebuilders today, with around £4bn wiped off their value in early trading.
Shares plummeted amid fears that work on developments would grind to a halt as workers were asked to stay at home and self-isolate.
Redrow led the downward charge, its shares slumping by 16%. Bellway and Taylor Wimpey were close behind, sliding 15%, while Barratt, Persimmon and Vistry all saw double-digit declines.
In the past eight working days Barratt’s shares have fallen 40%, Taylor Wimpey by 37%, Bellway is down 36.5% and Persimmon 34%.
The stock collapse is not completely unexpected, as work on hundreds of housing schemes across the UK looks set to dry up, according to the chair of the Bartlett Real Estate Institute.
Last week Yolande Barnes wrote in Housing Today that the impact of the pandemic was likely to have “completely wrecked” any notion of a post-election housing market boost and could have many wider effects.
Estate agent Countrywide, which had been the subject of a takeover bid until today when suitor LSL Property Holdings announced it was pulling out of the deal, reported it had seen “some softening [of interest] in recent days as a result of covid-19, it is too early to assess that impact”.
Meanwhile Unite Students, the listed provider of student accommodation, is to cut its rental activity over the summer months in response to the epidemic.
The Bristol-based group, which houses more than 50,000 students across the UK and last year bought student accommodation business Liberty Living for £1.4bn, said it planned to operate a reduced programme of summer business, including accommodation for students attending summer schools and other courses, “given the disruption to bookings”.
Unite’s summer business accounted for 3% of its rental income last year, or approximately £4.7m.
The impact on earnings of the reduced summer programme was not expected to be material, it said in a statement to the stock exchange.
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