Market Report: Is the rise of the housebuilders coming to an end?

The rise and rise of the housebuilders could be coming to an end – perhaps not for homeowners but for investors.

That’s the view of Liberum analyst Charlie Campbell, whose wave of downgrades brought the sector’s surge to a halt.

Mr Campbell said: “We believe the largest housebuilders’ valuations are too optimistic to withstand the gross margin pressure that we expect in the coming years as house price inflation is suppressed by a more vigilant regulator and build-cost inflation returns.”

Taylor Wimpey, the Footsie’s best-performer of 2015 with a 46 per cent leap, crashed with a 10.5p fall to 187.7p after a downgrade to sell.

Persimmon, 47p cheaper at 1,921p, and Barratt Developments, down 23.5p at 586.5p, suffered the same treatment.

Even Berkeley Group, which managed to keep its hold rating, dropped 109p to 3,196p.

Despite the sector’s woes, a pick-up from the price of oil – Brent crude rose $1.14 to $49.93 a barrel – helped the FTSE 100 end 21.81 points higher at 6,383.61.

BP was among the beneficiaries, up 15p at 403.25p. But the oil firm was outshone by aircraft parts maker Meggitt, which flew up 16p to 373.1p after Barclays suggested the shares are “too cheap to ignore” in the wake of last week’s profit warning which caused them to tank 20 per cent.

Miners were also back in favour after the recent sell-off, with BHP Billiton up 32.5p at 1,058.5p and Anglo American 17.6p richer at 561.9p.

On the FTSE 250, the oil price recovery propelled Tullow Oil up 35.2p to 235.5p and Premier Oil up 10.1p to 81.4p, while another raft of job cuts at the embattled valve maker Weir Group was applauded as its shares gushed 62p higher to 1,137p.

Online takeaway delivery firm Just Eat, down 7.2p at 433.7p, recouped some losses after an early slump as investors took the opportunity to bank some profits on the back of a solid third-quarter update.

Over on AIM, Northbridge leapt 20p to 91p as its directors invested in the struggling industrial services group, showing their faith in the firm’s turnaround.

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