Housebuilders' share slump as property prices plummet

Housebuilders suffered a share slump yesterday following the release of a gloomy survey on house prices.

A survey by Nationwide showed house prices are falling at their fastest rate since the early 1990s.

Year on year house prices are at 4.4% below their levels of May 2007 – the biggest fall since December 1992.

The bad news saw shares fall at Persimmon, Taylor Wimpey, Bovis Homes and Barratt Developments.

Persimmon slumped 26p to 487.5p, Taylor Wimpey lost 8.6% to close at 85.5p, Barratt slipped 5.2% to 190p, while Bovis Homes fell 19p to 429p, reported the Daily Telegraph and the Financial Times.

Analysts at Kaupthing had even worse news for Barratt, according to the Daily Telegraph.

The analysts said Jones Lang, who is handling the proposed sale of Wilson Bowden Developments for Barratt, had received 80 inquiries.

The analysts said disposal at around £250m was possible and would help chip into estimated net debt of £1.7bn at the end of June.