UK housing market fears as Marshalls and Purplebricks shares slide
A profit warning from the UK driveways to roofing firm Marshalls and a gloomy outlook from the online estate agent Purplebricks, which is fighting for its survival, have prompted sharp falls in their share prices and spooked the wider housing sector.
A day before its annual investor meeting, Marshalls, which produces landscaping, building and roofing products, said like-for-like sales had fallen by 14% year on year to £227m in the four months to 30 April. Including the acquisition of the pitched roofmaker Marley a year ago, sales rose 12%.
As a result, Marshalls expects full-year pre-tax profits to come in below analysts’ expectations of £83m. This compares with an adjusted profit of £90m last year. The news triggered a 13% drop in its share price while shares in housebuilders such as Berkeley Group, Barratt and Persimmon also fell.
The company said the sales decline reflected the uncertain macro-economic climate, a reduction in new housebuilding and ongoing weakness in private housing repairs, maintenance and investment activity.
The housing market has slowed sharply in the past six months as borrowing costs increased. House prices started falling after the turmoil in the mortgage market caused by Liz Truss and Kwasi Kwarteng’s mini-budget last September. The Bank of England is expected to raise interest rates to 4.5% this week, which would be a 12th successive rise as it seeks to tame stubbornly high inflation.
Marshalls noted that the National House Building Council, which provides warranties for buyers of new-build homes, reported a 27% drop in the number of new homes started between January and March. Housebuilding fell at the sharpest pace for almost three years in April, according to the latest construction survey from
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