UK House Building Sector May Be In Trouble
A report by stock market powerhouse UBS has caused great concern in the house building sector with many investors ‘running for the hills’. The report has clarified the alarming collapse in sales over the last two months and called into question the ability of some house builders to survive without the injection of funding to see them through what some claim are worse conditions than 1991. As more than £300 million was wiped off the value of the sector yesterday, there are growing concerns about the state the UK’s leading house builders.
Mark Stockdale of UBS issued revised forecasts for Barratt Developments, Persimmon and Taylor Wimpey where he has slashed his profits estimates for this year and next. He also believes that many companies will be forced to cut their dividend payments in order to retain as much funding as possible.
On the surface the report seems a little out of line with many in the sector but recent comments from the house builders themselves seem to back up the thoughts and views of UBS. The sector seems to have literally fallen off a cliff over the last eight weeks and many are wondering when the sector will bottom out.
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