Northern Rock Turmoil Hits Housebuilders

A mass sell-off of Northern Rock shares has seen more than £600 million wiped off the mortgage bank's stock market value.Shares dived by 35% as investors scrambled to offload holdings in the bank, with Alliance & Leicester also suffering from the fallout with a 30% drop.

Housebuilders also suffered steep falls amid market concerns that more expensive mortgages stemming from Northern Rock's difficulties could put the brakes on the housing market. Barratt Developments and Persimmon both fell by 7% whilst Redrow, endured a 7% drop and Taylor Wimpey shares lost 5%.

Northern Rock's share price tumble has now almost halved the bank's market value to £1.19 billion since it agreed emergency funding facilities from the Bank of England last Friday.
Shares in the group closed at 282.75p, down 155.25p - just over one-fifth of their value in February.