House builders came under renewed pressure yesterday after a leading broker slashed forecasts and warned of another tough year ahead. Financial Times
This year has been an annus horribilis for the housebuilding sector. It has fallen almost 50%
Citigroup was telling clients yesterday there would be no respite next year because of deteriorating credit concerns and weakening consumer confidence.
'We are now assuming a 3 per cent decline in average prices and a 10% drop in industry volumes. In total this has led to a 25-30 per cent drop in forecast earnings for 2008 and a slightly larger drop in 2009,' the broker said.
But Citi believes things could get worse if the credit market does not return to normal and the Bank of England does not cut rates aggressively.