Trading of Taylor Wimpey shares halted as recession fears rock housebuilders

The referendum’s result has left the spectre of recession recession looming over the industry and erased the industry’s standing as safe haven stocks.

This morning Taylor Wimpey saw a slump in its stock price of more than 8 per cent, triggering the five-minute suspension in trading.

Shares in banking giants Barclays and Royal Bank of Scotland also both fell dramatically and with a more than ten per cent drop in early trading, triggered the London Stock Exchange’s circuit breakers leading to a temporary suspension in trading.

Legal and General and challenger bank Virgin Money also saw losses, with trading in their shares suspended after market falls.

A morning of drama saw about £8 billion wiped off the market capitalisation of the country’s four biggest housebuilders, as Persimmon, Barratt, Crest Nicholson and Berkeley joined Taylor Wimpey as victims of last week’s referendum.

Over the last five years UK housebuilders have reported steady profit growth and rewarded investors with higher payouts after recovering from the 2008 financial crash. They had said there was more growth to come.

But uncertainty about the outcome had already started to send shudders through the sector ahead of the vote, with Berkeley warning earlier in June that there had been a 20 percent drop in reservations of new homes.

Meanwhile, building supplies firm Travis Perkins was trading 15 percent lower, while housebuilders on the midcap index, Redrow, Bovis and Bellway were down 20 percent, 16 percent and 17 percent respectively.