Travis Perkins warns on profit in sign of UK housing market difficulty
LONDON (Reuters) -Travis Perkins, Britain’s biggest supplier of building materials, warned profit would be hit by difficulties in the country’s housing market in one of the latest warning signs that rising interest rates are beginning to be felt by consumers.
Travis said that the jump in mortgage rates and ongoing high levels of inflation meant that the construction industry was holding back in building new homes and Britons were delaying extension projects and refurbishment of existing properties.
For 2023, Travis said it now expected full-year adjusted operating profit to be around 240 million pounds ($307 million), a downgrade from guidance in April when it said it was on track to meet market forecasts of about 272 million pounds.
British households have so far proven surprisingly resilient to sharp hikes in the prices of everyday goods and the rapid rise in interest rates that have lifted the cost of mortgage loans, but there is evidence that is starting to change.
Stubbornly high inflation means lenders have in recent weeks repeatedly re-priced home loan offerings, spurred by expectations for more interest rate hikes from the Bank of England.
Worries over higher mortgages now appear to be feeding through to the housing market, with Travis saying that the volumes in new build housing and private domestic building projects were lower.
Travis said the other half of its business, which serves large commercial and public infrastructure projects, however, was seeing resilient demand.
($1 = 0.7817 pounds)
(Reporting by Sarah Young in London and Aby Jose Koilparambil in Bengaluru; Editing by Rashmi Aich and Kate Holton)
