Builders help drag down FTSE after house prices stall

The FTSE 100 closed 14.29 points lower, or 0.18%, at 7,764.09.

Anna Wise
Tuesday 09 May 2023 17:36 BST
London’s FTSE 100 lost ground after new figures revealed house prices have slipped, sending shares in the UK’s top listed builders lower (Gareth Fuller/PA)
London’s FTSE 100 lost ground after new figures revealed house prices have slipped, sending shares in the UK’s top listed builders lower (Gareth Fuller/PA) (PA Wire)

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London’s FTSE 100 lost ground after new figures revealed house prices have slipped, sending shares in the UK’s top listed builders lower.

The data from Halifax found the average house price fell by about £1,000 in April, the first downturn after three consecutive months of increases.

The lender said it expects to see more downward pressure on house prices over the course of the year, as the housing market remains subdued.

Student housing owner Unite Group sunk to the bottom of the FTSE with shares down by more than 4%, while British Land and Land Securities Group dipped by more than 3%.

Major builders Berkeley Group and Barratt Developments also saw their share price dip by more than 2% at close.

Meanwhile, British Airways owner IAG Group jumped to the top of the index after rival Ryanair announced it was creating around 10,000 jobs after ordering 300 new aircraft, signalling an optimistic outlook for the aviation sector. 

The FTSE 100, however, closed 14.29 points lower, or 0.18%, at 7,764.09.

The lacklustre investor mood comes ahead of important US inflation data on Wednesday, which is expected to influence the Federal Reserve’s future monetary policy decisions.

US stock markets started the day on the backfoot with the S&P 500 down 0.35% and Dow Jones down 0.1% by the time European markets closed.

Craig Erlam, senior market analyst for OANDA, said: “We’re seeing a slightly softer trading session on Tuesday as investors eye crucial inflation data on Wednesday.

“We’ve finally reached the point at which the Federal Reserve may be at the end of its tightening cycle and we can start to look forward to when it can feasibly begin to ease policy in order to offset any shock to the economy.

“But in order for either of these to occur, we need to see evidence in the data that the Fed is on a path to 2%, starting Wednesday.”

European markets saw a subdued session with the Cac 40 declining 0.59%, and the German Dax eking up by just 0.02%.

The pound was flat against the US dollar at 1.2616, but up 0.5% against the euro to 1.1519.

In company news, shares in Purplebricks plummeted to a new record low after the online estate agent warned its cash reserves were under threat, and shareholders are set to lose value if a sale of the business goes ahead.

Purplebricks put itself up for sale in February and it is still looking for a buyer to revive its fortunes.

But the firm said its cash reserves could diminish if a strategic review and sale were not completed soon.

Shares in the company were 66% lower when markets closed.

Insurer Direct Line saw its share price slip after revealing its earnings outlook remains “challenging” as the cost of claims has shot up.

It comes despite the company pushing up prices across its motor and home insurance policies in efforts to offset cost rises.

But the business assured investors it was taking action to improve the business’s performance and that trading over the first quarter had been “positive”.

Shares in Direct Line were down 4.6% at close.

The biggest risers on the FTSE 100 were IAG, up 5.3p to 155.8p, Flutter Entertainment, up 350p to 15820p, Relx, up 45p to 2479p, Beazley, up 9p to 590.5p, and Intercontinental Hotels Group, up 80p to 5492p.

The biggest fallers on the FTSE 100 were Unite Group, down 43.0p to 908.5p, Ocado, down 20.5p to 475p, Land Securities, down 21.2p to 644.6p, DCC, down 151.0p to 4714p, and British Land, down 11.4p to 386.9p.

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