Shares in the housebuilding sector subsided on Tuesday morning after mid-cap builder MJ Gleeson (LSE:GLE) issued a profit warning.
The company said profit margins at its Gleeson Homes division had been hit by a combination of rising build costs, flat sale prices, increased use of buyer incentives and several bulk sales.
"The pace of the housing market recovery has not been sufficient to offset the cumulative impact on Gleeson Homes' gross margin of a number of headwinds through the year," it said, resulting in gross margins being around 1% lower than previously expected.
Gleeson shares tanked 21%, while on the FTSE 250, Vistry Group PLC (LSE:VTY) fell 4.1% and Crest Nicholson PLC (LSE:CRST) was down 2.3%.
On the FTSE 100 Barratt Redrow PLC (LSE:BTRW), Berkeley Group Holdings PLC (LSE:BKG), Persimmon PLC (LSE:PSN) and Taylor Wimpey PLC (LSE:TW.) all dropped more than 1%.