The housing market is deteriorating at a much faster rate than it did during the recession of the early 1990s, according to house builder Bellway, as expectancy grew in the City that some UK house builders could be forced to raise capital to shore up their balance sheets.
Bellway said that the spring season – traditionally a strong sales period for house builders – failed to take off and a restricted supply of mortgages was exacerbating the problem. It now expects volumes to fall by 10%-15% this year. Alistair Leitch, Bellway’s finance director, said: 'I went through the 1989/90 slowdown with the company and it was drip, drip, drip then. Now the rapidity is striking.'
Despite the downbeat outlook, shares in Bellway rose 5.5% to 626.5p yesterday because its trading update was not as bad as some analysts had feared.