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Share price in big UK estate agent chain fall as housing market cools

The share price in one of the UK’s biggest estate agent chains and some of the largest British housebuilders fell on Friday amid the latest warnings about the outlook for the housing market, as rising interest rates and the cost of living crisis squeeze potential homebuyers.

The share price of LSL Property Services, one of the UK’s largest estate agent chains, tumbled by as much as 11% after it warned on profits for the second half of the year and said conditions in the housing market had become more challenging than anticipated.

Meanwhile, the share prices of some of the UK’s biggest housebuilders listed on the London Stock Exchange also slid after analysts at the German investment bank Berenberg slashed their profit forecasts for the sector due to further consumer declines ability to afford new homes.

Developers including Persimmon, Taylor Wimpey, Bellway, Vistry Group, Redrow and Berkeley saw their share price trade about 1% lower on Friday morning before recovering slightly in the afternoon.

Persimmon’s shares have dropped by nearly 54% so far this year, while its rival Taylor Wimpey’s shares have slipped 40% since January amid the worsening outlook for the UK housing market.

David Stewart, LSL’s chief executive, said the UK’s housing and mortgage markets had been “disrupted by political uncertainty and sharply increasing interest rates” since the disastrous mini-budget unveiled in September by Liz Truss’s government.

He added: “Across the market, this has given rise to a reduction in mortgage activity and new house sales and an increase in fall-throughs of previously agreed sales.”

Analysts at Berenberg outlined their “cautious” view of the outlook for the home construction sector in a research note as they forecast that UK house prices would fall by about 5% between 2023 and 2024 while property sales volumes would decrease by 10%.

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