Shares in Persimmon (LON:PSN) have fallen deep into the red in London this morning with reports suggesting that the blue-chip housebuilder could lose its right to sell Help to Buy homes. The news comes as the company prepares to update investors on its full-year performance tomorrow.
As of 10:24 GMT, Persimmon’s share price had given up 5.51 percent to 2,332.00p, significantly underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.22 percent higher at 7,194.11 points. The group’s shares have lost a little over six percent of their value over the past year, as compared with about a 0.8-percent dip in the Footsie.
Help to Buy concerns
Persimmon’s shares have come under pressure as The Times reported that James Brokenshire, the housing secretary, was reviewing the group’s participation in the government’s Help to Buy scheme, which accounted for half of the homes it built last year. The move comes amid allegations of poor standards and punitive hidden charges.
Reuters meanwhile quoted a source close to the minister as commenting that “leasehold, build quality, their leadership seemingly not getting they’re accountable to their customers, are all points that have been raised by (the minister) privately”.
The comments come after Persimmon disclosed in November that its chief executive Jeff Fairburn was stepping down following a row over his £75-million pay package.
Analysts on Persimmon
The 14 analysts offering 12-month price targets for Persimmon for the Financial Times have a median target of 2,585.00p on the shares, with a high estimate of 3,173.00p and a low estimate of 2,025.00p. As of February 23, the consensus forecast amongst 16 polled investment analysts covering the blue-chip group has it that the company will outperform the market.