Report hurts U.K. homebuilders’ shares
LONDON — Shares of Britain’s biggest homebuilders fell in London trading after the website Property Week reported that a government home-loan program is at risk of cancellation.
A spokesman for the Department for Communities and Local Government said by email that it’s incorrect to infer from a review of Help to Buy that the government is considering early cancellation for the program that provides five-year interest-free home loans. The department is considering all options for the Help to Buy program when it runs out in 2021, as it said in a policy document in February, but it didn’t tell Property Week that the program could be wound down or replaced before then, he said.
The Financial Times Stock Exchange 350 Household Goods & Home Construction Index fell as much as 2 percent after Property Week reported that a government review could lead to Help to Buy ending before the expiration date. Purchases through Help to Buy account for 38 percent of all new private home sales, and its closure could reduce homebuilder profits by about 10 percent, Liberum Capital Ltd. analysts including Charlie Campbell wrote in a note to clients Friday.