CRACKS in Britain’s property sector deepened yesterday after one of its biggest house- builders warned of a drop in profits.
Crest Nicholson slashed profit forecasts, saying market conditions had “worsened” due to “high inflation and rising interest rates”.
It said first-time buyers were being hit particularly badly as they were no longer able to claim Government support through Help to Buy and couldn’t rely on property equity to fund their purchase.
Shares in Crest Nicholson slumped by 10.6 per cent, or 20.56p, to 173.44p after warning that it would only make £50million of profits this year, compared with its guidance of £73.4million.
The warning alarmed investors in the sector and sent shares in rival housebuilders Taylor Wimpey, Berkeley Group, Redrow, Persimmon, and Barratt Developments lower.
Worries about the housing market has wiped more than £2billion off the value of FTSE 350-listed housebuilders in August.
![Hope for millions as major banks launch mortage 'price war'](https://www.thesun.co.uk/wp-content/uploads/2022/11/savills-property-estate-agent-sign-391573534-1.jpg?strip=all&w=360&h=240&crop=1)
![Nine first-time buyer warning signs that reveal hidden issues costing THOUSANDS](https://www.thesun.co.uk/wp-content/uploads/2023/08/KS_COMP_expert-property.jpg?strip=all&w=360&h=240&crop=1)
Crest Nicholson’s woes follow Rightmove figures showing a 15 per cent slump in the number of house sales since 2019 — and the biggest monthly drop in August since 2018.
Spiralling mortgage costs have made homes even more unaffordable.
It has led sellers to slash their asking prices, with average asking prices falling by 1.9 per cent, or £7,012, in the past month, to £364,895.
Meanwhile, the Bank of England’s move to hike interest rates 14 times in a row to tackle inflation has pushed average mortgage rates up to 6.76 per cent, according to Moneyfacts.
Most read in Business
Despite some lenders lowering their rates, the higher mortgage costs means buying a first home is pricier than renting.
A first-time buyer now has to pay an extra £122 for a monthly mortgage compared with what the same property would cost to rent, Zoopla found.
Two years ago, when average mortgages were around 2 per cent, a first-time buyer would have saved £245 by buying.
The bleak news for the housing sector knocked the FTSE 250 index — which is more representative of the health of the British economy as it has more domestic firms — down by 197.61 points, or 1.09 per cent, to 17,898.99 points.
Russ Mould, investment director at AJ Bell, said: “Crest Nicholson’s profit warning has laid bare the scale of the impact of a housing slowdown.”
GAS HIKES BLOW
HOPES of lower energy bills have taken a dent after wholesale gas prices shot up by 11 per cent yesterday.
It followed strike threats at three major gas plants in Australia, which could disrupt shipments to the UK.
An Aussie union warned stoppages there could start within the next two weeks.
The sites account for 10 per cent of global supplies of liquefied natural gas, which the UK relies on heavily.
Prices hit record highs last summer amid fears over Russia’s war in Ukraine.
FAMILY spending power has risen by £9.48 a week to £218 since last July, Asda’s income tracker shows.
The boost for average household disposable income is driven by falls in energy bills.
But last month’s figure is still £26 below 2021’s average.
NATWEST SALE HIT
NATWEST’S Nigel Farage “de-banking” scandal could delay the Government’s hopes to sell down its stake.
The taxpayer owns 39 per cent of the lender, after 2008’s £45.5billion bailout.
The Government’s position as biggest shareholder was a big driver in the shock exit of boss Alison Rose.
Dame Alison admitted leaking stories about the decision by NatWest-owned Coutts to close ex-Ukip leader Mr Farage’s account.
Analysts at Bloomberg said the disruption “could delay the sell-down of the stake”.
DEAL VS SINGERS’ A.I. FAKES
FEARS that fake versions of pop stars’ voices could flood the music industry has prompted Universal and Google to strike an AI deal.
Universal, which counts superstars Taylor Swift, Drake, Harry Styles and Billie Eilish on its label, yesterday agreed a set of “AI music principles” with YouTube.
The deal comes amid worries “deepfake” songs, which clone the voices of artists, could destroy original music.
Universal said the principles will help “responsibly embrace this rapidly advancing field”.
The code agrees to protect artists’ “creative work” and fight “trademark and copyright abuse”.
Some of the label’s artists are also joining a YouTube research group on AI.
Sir Lucian Grainge, CEO of the music corporation, said the agreement would allow “artists and songwriters to maintain their creative integrity” and ensure they are paid fairly.
GIRLS’ SCHOOL KIT’S DEARER
KITTING out the kids for their return to school blows a £300 hole in the wallet, research has found.
Parents of daughters are also stung by a so-called “pink tax”, as girls’ clothes are more expensive.
Analysis by insolvency firm Creditfix found that while parents of boys going into reception and early years can expect uniforms alone to cost an average £82.40, parents of girls have to spend £89.
Prices also rise as children get older, with uniforms and other school gear for boys in Year Ten and Year 11 costing £302.90, and total kit for girls entering the same school years costing £308.10.
Layla Johnson at Creditfix said: “Families are feeling the strain of paying for basic necessities and bills, and parents of girls could be feeling it slightly more”.
DOMINO’S SLICE OFF
DOMINO’S PIZZA is to finally shut down in Russia — as its franchise operator files for bankruptcy.
London-listed DP EurasiaU, which also owns the chain’s franchise in Turkey, Georgia and Azerbaijan, is abandoning plans to sell the business.
![A Place in the Sun's Laura Hamilton flooded with support from fans](https://www.thesun.co.uk/wp-content/uploads/2023/08/crop-23571886-1.jpg?strip=all&w=360&h=240&crop=1)
![Brit tourist drowns in Turkey after jumping into river during family holiday](https://www.thesun.co.uk/wp-content/uploads/2023/08/msemail_Newsflash-BritishTouristDiedLife-04jpg-JS839325544.jpg?strip=all&w=360&h=240&crop=1)
It comes nine months after Domino’s said it may pull out of Russia and 17 months after the nation’s invasion of Ukraine.
DP Eurasia blamed the move on a “challenging environment”