Britain's government minister George Osbourn asked the Bank of England to play an even bigger role in guaranteeing that his controversial "Help to Buy" housing program does not cause a new property boom. Analysts downplayed the importance of the comments for housebuilders' earnings, but markets used them as an excuse to get out of a number of this year's prime activity stocks.
Shares in Persimmon fell 4.5 percent, the highest faller on the FTSE 100 and mid-cap rival Bovis, meanwhile, dropped 3.6 percent.
"Housebuilders are taking quite a large hit these days, they've had quite good performance for the year-to-date"
"This could be a sector that is considerably supported by government policy and there has been lots of speculation that it's turning into a bubble."
Sentiment on the housing sector was additional knocked by comments from the Bank of England governor Mark Carney that he would like for more bond-buying stimulation given the recovering economy. The comments distributed expectations that the BoE might become the first major international financial organisation to raise rates.
“Ashleigh Fletcher, Director of Residential Agency for Fine & Country (http://coombe.fineandcountry.co.uk) commented “Property Markets here in the UK remain strong. Interest levels remain high with many properties seeing multiple offers only after a few days, or sometimes even hours, worth of marketing.”
Meanwhile David Cameroon is still claiming that “There is no bubble, the property market is still recovering and from a low base”
For more information on these topics visit: