The unknown impact of government spending cuts and uncertainty over incentives to build new houses has wiped almost £1bn off the value of Britain's seven largest housebuilding companies.
Plummeting government budgets and proposed changes to the planning system that will make it easier for residents to block development have resulted in sharp falls in the market capitalisation of the housing sector.
Taylor Wimpey – owners of the Royal Alexandra site in Dyke Rd - has lost 30% of its value compared to a drop of less than 2% in the wider FTSE 100 index. The seven largest housing firms have lost an average of 15%.
With the lowest peacetime level of housebuilding in over 80 years, the industry was one of the worst affected sectors during the recession. A £1.5bn project to boost affordable housing was announced by the previous Labour government last year which resulted in 64,000 homes being built in 2009 but it was one of the victims of the early spending cuts made
The chief executive of the National Housing Federation has warned that: "The building of affordable homes could potentially grind to a halt this" Builders are also worried about the government's abolition of top-down targets in the regional spatial strategies [RSS] that determined the number of homes to be built in each area, and forced councils to work to meet housing need.
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