London 11 September 2022 by Matteo Corsini
Shares in British housebuilders' index tumbled to a near nine-year low on Friday after analysts at HSBC warned that the country is on the cusp of a housing downturn, as a steep climb in mortgage rates casts a cloud over demand.
The UK housing sector, a pandemic winner, is now showing signs of losing some momentum with surveyors reporting fewer new-buyer inquiries in recent months, while the number of mortgage approvals for house purchases has fallen below pre-pandemic levels.
HSBC's Building Materials team predicts a 20% slump in UK housing demand for a year from this autumn, the brokerage wrote in a note. Britain's housebuilders' index (.FTNMX402020) fell about 4% to its lowest since 2013.
The brokerage downgraded all UK housebuilders under its coverage to "hold" from "buy", except for high-end homebuilder Berkeley Group (BKGH.L), whose rating was cut to "reduce" from "hold". Meanwhile, it kept its "buy" rating on Vistry (VTYV.L).