Redrow and Countrywide shares fall on slowing housing market

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Shares have sunk in the housebuilder Redrow and estate agency group Countrywide after the two firms flagged a slowdown in the UK housing market.

Redrow tumbled 5% in morning trading on the London Stock Exchange, as "ongoing political and economic uncertainty" caused sales to slip in recent weeks compared to a "very strong" market last year.

Countrywide was also suffering, falling just shy of 2%, as it warned the housing market was "challenging" and the number of transactions made was likely to fall in contrast to 2016.

The update comes after a survey from the Royal Institution of Chartered Surveyors (RICS) showed the level of house sales falling or coming in flat across the UK.

In a statement ahead of Redrow's annual general meeting, chairman Steve Morgan said: "I am pleased to report that for the first 18 weeks of the current financial year, Redrow has traded in line with expectations.

"The sales market was buoyant in the first quarter, however ongoing political and economic uncertainty has resulted in a slight slowdown in sales in recent weeks in comparison to a very strong sales market last year.

"I don't anticipate that last week's interest rate increase will have any adverse impact on the market as mortgage rates by historical standards remain low and very competitive."

Flintshire-based Redrow said net private reservations were up 2% to 1,548 for the 18 weeks to November 3, with the average selling price rising from £352,000 to £371,000 for the current financial year to date.

The FTSE 250 group said its total order book had also climbed 3% to hit an all-time high of £1.2 billion.

Meanwhile, Countrywide saw group revenues drop 7% to £175.1 million in the third quarter compared to last year.

It said London sales and lettings, its financial services operation and its business-to-business arm proved resilient, helping to offset a slowdown in UK housing transactions.

Estate agency revenues slipped 16% to £47.8 million over the three month period, with lettings revenues falling 3% to £47.3 million over the period.

Alison Platt, Countrywide's group chief executive, said: "The market for housing transactions remains challenging and is likely to be down overall compared with 2016.

"As in previous years, the final quarter remains important and we currently expect our results for the full year to be towards the lower end of the range of market expectations."