FTSE 100 close: Markets close lower as housebuilders weigh on index
Strong morning bumps for Primark-owner Associated British Foods and BT were offset by a slump for housebuilders today as the FTSE 100 closed marginally lower.
A slump in trading for housebuilders kept movement on London’s flagship index subdued, with the index closing lower. Housebuilders were down after figures from Halifax showed a first annual fall in house prices for over a decade.
Persimmon was down 1.8 per cent, Berkeley Group 0.9 per cent, Taylor Wimpey 1.0 per cent and Barratt Developments 1.21 per cent.
Halifax said the average house price has fallen by one per cent of the past year despite a surge in sales in early spring. The market has been bruised by the Bank of England’s decision to hike interest rates to 4.5 per cent, which in turn led lenders to raise rates on mortgages.
Things are unlikely to get better fast. Over the past few weeks, mortgage rates have skyrocketed amid fears that interest rates will have to go higher than originally anticipated.
As Hargreaves Lansdown’s Susannah Streeter commented: “This fall won’t reflect the impact of the pulling of the cheapest deals from the market in recent weeks, and as monthly mortgage payments become increasingly unaffordable, prices are likely to have to fall further to lure would-be movers back into the market.”
New data out today also showed the number of repossessions jumped by around 25 per cent in the first quarter, with 1,250 repossessions in the period.
The poor performance from housebuilders offset strong performances elsewhere. BT closed top of the FTSE 100, rising 3.8 per cent. Ocado and Associated British Foods closed 3.6 per cent and 3.4 per cent higher respectively.