Shares in Barratt Developments fell yesterday, after the housebuilder revealed that it has been forced to discount prime London homes to increase sales.
The company’s share price closed at 469.6p, down 14.7p from 484.3p, after it said that six weeks ago it took action to reduce prices by 5-10% across three central London sites.
The fall came despite reassurances by Barratt chief executive David Thomas (pictured) that the rest of the market was performing well.
Investec Wealth & Investment said the comments about London “grabbed attention and spooked the markets”. It added: “Despite yesterday’s negative market reaction, the Barratt trading update was mainly upbeat.”
Barratt also announced that it had exchanged a £47m build and sale agreement on a bespoke development of 39 apartments to further “de-risk London delivery”.
The share price rallied slightly today, standing at 477.4p at lunchtime.
You may also be interested in the Mortgage Solutions newsletter. All the latest news, analysis and insight from the mainstream residential lending market. Including industry news, adviser business strategy tips and market commentary.