LONDON—Shares in U.K. housebuilders rallied Thursday after the Bank of England'sFinancial Policy Committee outlined softer-than-expected measures to take the housing market off the boil.
Moves in U.K. real-estate stocks Thursday helped to undo some, but not all, of the weakness in the sector in the weeks leading up to the report.
Persimmon advanced 4.2%, Barratt Developments BDEV.LN +4.79% gained 3.7% and Travis Perkins advanced 3.3%. FTSE 250-listed Taylor Wimpey, TW.LN +5.17%Berkeley Group BKG.LN +3.15% and Bellway BWY.LN +3.88% rose well over 3%.
The FPC outlined some measures to cool the strength in the U.K. housing market, including limits on the size of mortgage loans relative to incomes, but added that it doesn't see an "imminent threat" to financial stability from rising house prices and high household borrowing.
BOE Governor Mark Carney said in a news conference that followed the report that he doesn't expect the new rules to have a material impact on housing transactions.
"This is presumably a first step on dealing with a potential housing bubble that could destabilize the U.K. economy," said James Knightley, an economist at ING Bank. "However, these tentative measures will not significantly impact the outlook for the housing market in the near term."
Sterling was also boosted, with analysts highlighting Mr. Carney's assertion that the mortgage policies announced don't alter the outlook for U.K. interest rates, which many expect to rise before the end of the year.
"These measures aren't as draconian as maybe some had wondered," said Daragh Maher, a currency strategist at HSBC. HSBA.LN -1.16%"There's been an underlying enthusiasm for sterling that may have been sidelined ahead of this announcement, and is now returning."
The pound added 0.3% against the dollar to trade at $1.7023. Sterling also added 0.4% against the euro.
Source : http://online.wsj.com/articles/bank-of-englands-move-to-cool-housing-market-lifts-real-estate-shares-1403781188
Moves in U.K. real-estate stocks Thursday helped to undo some, but not all, of the weakness in the sector in the weeks leading up to the report.
Persimmon advanced 4.2%, Barratt Developments BDEV.LN +4.79% gained 3.7% and Travis Perkins advanced 3.3%. FTSE 250-listed Taylor Wimpey, TW.LN +5.17%Berkeley Group BKG.LN +3.15% and Bellway BWY.LN +3.88% rose well over 3%.
The FPC outlined some measures to cool the strength in the U.K. housing market, including limits on the size of mortgage loans relative to incomes, but added that it doesn't see an "imminent threat" to financial stability from rising house prices and high household borrowing.
BOE Governor Mark Carney said in a news conference that followed the report that he doesn't expect the new rules to have a material impact on housing transactions.
"This is presumably a first step on dealing with a potential housing bubble that could destabilize the U.K. economy," said James Knightley, an economist at ING Bank. "However, these tentative measures will not significantly impact the outlook for the housing market in the near term."
Sterling was also boosted, with analysts highlighting Mr. Carney's assertion that the mortgage policies announced don't alter the outlook for U.K. interest rates, which many expect to rise before the end of the year.
"These measures aren't as draconian as maybe some had wondered," said Daragh Maher, a currency strategist at HSBC. HSBA.LN -1.16%"There's been an underlying enthusiasm for sterling that may have been sidelined ahead of this announcement, and is now returning."
The pound added 0.3% against the dollar to trade at $1.7023. Sterling also added 0.4% against the euro.
Source : http://online.wsj.com/articles/bank-of-englands-move-to-cool-housing-market-lifts-real-estate-shares-1403781188
0 comments:
Post a Comment