Housebuilders slump as HSBC warns over downturn

London-listed housebuilders were under the cosh on Friday after HSBC downgraded a raft of key names in the sector, cautioning over a downturn ahead.

The bank cut Barratt Developments, Persimmon, Bellway, Crest Nicholson, Taylor Wimpey and Redrow to ‘hold’ from ‘buy’. Berkeley was downgraded to ‘reduce’ from ‘hold’.

HSBC said the sector was set for a downturn in the face of rising interest rates and falling house prices.

The bank said in a note: "The HSBC Building Materials team now forecasts a 20% fall in UK housing demand for a year from this autumn, a concomitant 7.5% fall in UK existing house prices, excluding central London at double that, and a 5% fall in UK new build prices."

At 1415 BST, Berkeley, Persimmon and Barratt shares were down 4.5%, 3.5% and 3.4% respectively. Meanwhile, Taylor Wimpey fell 1.5%, Redrow slumped 6.5% and Crest Nicholson was down 4.5%. Bellway retreated 3.4%.

Vistry, on which HSBC maintained a ‘buy’ rating, was down 2.1%.