British Housing Stocks Fall
British housing stocks went under some pressure on Friday as Prime Minister Borris Johnson suspended the nation’s housing market. The sudden stop of business was due to the coronavirus, the pandemic that has hit the world’s economies.
The suspension is a rational move from Borris, as meetings and viewings of properties pose health risks at this time. The whole business of removals presents danger in the spread of the virus
This affects not only the country’s real estate agents, housebuilders and their suppliers. It also extends to banks who depend heavily on mortgage lending and the commissions it generates. This includes insurance companies they deal with.
British Housing Stocks Movement
In the stock market Perssimon shares went down 8.2% while Redrow shares went down 7.1%. Redrow fell after its announcement that it will close all its building sites and sales offices for the foreseeable future.
Moreover, Taylor Wimpey shares and Barratt Developments shares went down 4.2% and 4.1% respectively. Also down was online specialist Rightmove which lost 6.3%.
Meanwhile, the broader FTSE 100 and FTSE 250 indices went down 4.0% and 3.4%, respectively, while the benchmark Stoxx 600 went down 2.7%.
The Outperformers in British Housing Stocks
Stocks of Berkeley Group, which concentrates on upper-market construction in London and the south of England were down only 1.4%. It said it will pay its dividend for the year ending next week as planned. It also intends to pay out another 140 million pounds to shareholders through dividends and buybacks by September.
Furthermore, the company will still have over 1 billion pounds of net cash after the full-year dividend payment. Its total accessible liquidity will still be at 1.75 billion pounds.
Countrywide is another relative outperformer in British housing stocks. Its shares have fallen 79% in the last month after LSL abandoned its intention to buy the company. A separate proposed sale of its commercial property arm also fell through.
European Shares Fall Further
In more news on Europe’s stock market, European shares fell on Friday. EU lawmakers failed to agree on a comprehensive economic rescue package on the coronavirus.
The pan-European STOXX 600 index started the day about 2% lower. It then fell further in stock trading 3.7% following the announcement about Prime Minister Boris Johnson’s test. EU lawmakers have extended the deadline for agreeing on their economic rescue package on the COVID-19 pandemic.
