Sector movers: Real estate and construction crumble on Foxtons warning

27th Aug 2014 16:57

The construction and real estate investment sectors were the worst performers on Wednesday as the nervous outlook for housing was given further jitters by estate agent Foxton's warning of a slowdown in the second half. The high profile London agent said: "In H2 we expect growth in transaction volumes to slow from the rapid rate in H1 as policy initiatives and expectation of increases in interest rates are now having an impact on short term demand among buyers". Foxtons said measures by regulators and the Bank of England to rein in the rampant housing market were already hitting short-term demand, but it stressed that lower rates of growth will only be a short-term issue.Foxtons itself was down over 10%, dragging rival Countrywide down 4.5%, with a read-across hitting FTSE 100 building materials group CRH in the construction sector, which fell 1.7%, with Balfour Beatty down 1.5% and Morgan Sindall off 1.3%. In parallel Balfour Beatty unveiled its much anticipated public-private partnership portfolio (PPP) valuation at £1.05bn, up from £766m in December. There was some disappointment as media reports had ascribed a £1.1bn-£1.2bn valuation.Analysts at Liberum and Westhouse said the figure was in line with City expectations, with the former issuing a 'buy' recommendation and the latter a 'sell'.Said Westhouse: "We believe the PPP business as an entity is probably worth more when future investment prospects are considered, but given that newsflow has assumed increasing importance following the failed Carillion bid, we believe the immediate impact on the share price of the number coming in below the media estimates may be neutral to slightly negative."OH