UK housebuilders take a hit as Labour’s housing plans send investors fleeing


Some of the biggest names in UK housebuilding took a hit Monday as Labour's plans to impose tight rules on landlords emerged.

Persimmon (LON:PSN) lost 0.40% to 1,72p, Taylor Wimpey (LON:TW.) lost 0.95% to 167.60p and Bovis Homes (LON:BVS) shed 1.14% to 950p.

Barratt Developments (LON:BDEV) lost 1.11% to 535p.

Ed Miliband, if he wins the  May 7 vote, wants to stop private landlords from increasing rent by more than the level of consumer prices index (CPI) inflation for three years.

The private rental sector is ever growing as people increasingly are forced out of the bought housing market due to affordability.

Home ownership has fallen to its lowest level for 30 years.

The controls on the private rental market are increasingly being subjected to closer scrutiny.

But industry commentators reckon Ed's move could see landlords exit the market, therefore reducing supply, precisely the opposite of the motives behind the plan.

Conservative housing minister Brandon Lewis was quoted as saying: "Rent controls never work - they force up rents and destroy investment in housing leading to fewer homes to rent and poorer quality accommodation."

Quick facts: Persimmon

Price: 2523.5 GBX

Market: LSE
Market Cap: £8.04 billion

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