Shares in UK house builders rose yesterday after Persimmon said it thought conditions in the sector were beginning to stabilise.

Mike Farley, chief executive, said trading had not worsened since a big downturn in April. Although pre-tax profits fell 64% to £100.1m and the group slashed its dividend by more than two-thirds, Persimmon’s shares closed nearly 10 per cent stronger at 327p.

Shares in other housebuilders were boosted by Persimmon’s comments. Barratt Developments enjoyed the biggest improvement, with its shares ending 13.75% stronger at 128.25p. Taylor Wimpey’s were up 2.42% to 42.25p, while Bovis Homes rose 3.45% to 412.25p. Bellway saw a 7.60% improvement to 566p, while Berkeley ended 1.37% up on 816.5p.

However, Alistair Stewart, a bearish housing analyst at Dresdner Kleinwort, said short-covering in Persimmon, Barratt and Taylor Wimpey shares had fuelled the surges in their share prices, taking the rest of the sector with them.

Financial Times, The Times, The Independent