Housebuilders are on the slide after fresh data showed that August was a washout for the housing market and Crest Nicholson posted a profit warning.
Its shares have tanked after it revised its profit forecast for the year by a whopping 47%.
Sales are deteriorating at a rapid click, which is not surprising given that potential home buyers will be running scared from sky-high mortgages.
The update has sent a shiver through the rest of the market amid expectations that more people will be opting to stay put in current homes or rented accommodation rather than taking on a huge debt burden at such an uncertain time.
Analysis by Rightmove showed asking prices fell by 1.9% the biggest fall for the month for five years, pushing the average cost of a home down by just over £7,000 to £364,000.
Sellers might be reducing their prices but it’s still not enough of a lure, given how unaffordable houses have become.
The number of deals shaken on in August have been 15% lower than the same month in 2019.
The low level of properties on the market isn’t helping with homeowners clearly more reluctant to sell in a falling market.
Even though the headache of cost-inflation is easing somewhat for housebuilders, there is very dim light at the end of the tunnel in terms of demand, given that interest rates are expected to be pushed up again in September.
Nevertheless, the housing shortages in populous parts of the UK don’t look like being solved any time soon, which should give housebuilders more resilience for the longer term.