Property Shares Rally

Some signs of relief emerged on Friday for property and construction industry as shares in many of the leading companies rose.

The share rises were influenced by news that the US Treasury and Federal Reserve are close to creating a giant state-sponsored vehicle to take illiquid assets from banks’ balance sheets, in order to increase confidence in the financial markets. Property, with its reliance on debt, should be a beneficiary of anything which eases the pressure on banks.

UK financial stocks were also influenced by new regulation from the Financial Services Authority prohibiting the short selling shares. This legislation does not affect property stocks, but should improve the short-term climate for banks.

The biggest winners were Taylor Wimpey and Barratt whose early trading earned them respective gains of 18% (to 55p) and 16% (to 150p).

Other gains included:

• Persimmon – up 11% to 439p
• Redrow – up 7% to 228p
• Bovis – up 6% to 518p
• Bellway – up 5% to 675p
• Berkeley – up 3% to 904p