Last Housebuilder Relegated From The FTSE100
In a sign of the times there are no housebuilders left in the Blue Chip share club, the FTSE100, which contains the elite of the UK business world. The relegation of Persimmon to the FTSE250 was the last of the housebuilders to leave the FTSE100 with Barratt Developments and Taylor Wimpey recently biting the dust.
While the move was fully expected there are short term repercussions for the share price of Persimmon with an array of index tracker funds now obliged to sell their Persimmon holdings in what is a very depressed house building sector. This may well further exaggerate the recent selling pressure and see the shares struggle to make much headway. So what next for the house building sector?
The signs are not good at the moment with Barratt Developments forced to issue an assurance to the market that they were not on the verge of going under and other constituents of the sector under serious pressure as well. When you consider that the value of Persimmon has fallen from £4 billion to under £1 billion in just over a year and Barratt Developments has seen its share price fall by 95% from last years high, things really do look bleak.
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