UK’s FTSE 350 housebuilder shares fell 2.4% in the first 15 minutes of trading today as the industry reacted to the shock election result that left no party with a majority in parliament.
Both the FTSE 350 housebuilder and REIT markets opened 0.6% down on close last night in a muted reaction to the Conservatives losing their majority but housebuilder shares continued falling throughout the morning.
Berkeley’s share price fell 3.7% in the first 15 minutes of trading, while Taylor Wimpey was down 3.3%.
Before the markets opened, analysts at Jefferies said they expect housebuilder shares to overreact as they did following the UK referendum less than a year ago. That weakness, they said, was a buying opportunity today, next week and the week after.
REITs were more resilient, with a 1.9% loss in value in the first 15 minutes, although Land Securities fell 3.8%.
Hansteen was the best performing REIT in the morning, taking a 0.2% loss, followed by Safestore and NewRiver.
Shares in REITs had been steady in the week leading up to the election, rising 0.6% between Monday and Thursday, as the market counted on a comfortable Conservative majority.
While the combination of a surprise result and renewed uncertainty over the future of Brexit negotiations shook the market, the possibility of a softer exit from the EU could have cushioned the fall.
Housebuilders and REITs have so far performed better than in the days following the EU referendum when slumps of up to 30% were seen across the market.
■ Bookmark www.egi.co.uk/news/election2017 to find out the property fallout after this morning’s hung parliament announcement.
REITs and housebuilder shares react to hung parliament
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