Shares in housebuilders rebounded on Wednesday after an update from Crest Nicholson PLC (LSE:CRST) and as government bond yields eased.
Surrey-headquartered Crest reported improved trading since the middle of January, with an open market sales rate of 0.64 per site per week in the last 10 weeks, up from 0.61 a year ago, as management cited "encouraging levels of customer enquiries".
The FTSE Small Cap-listed group said it was yet to see any material trading impact from the shock of higher energy costs, so has kept guidance for the year unchanged.
Meanwhile, in the background, UK government borrowing costs eased on Wednesday, in synch with falling energy prices.
Together, this boosted the wider building sector, with Bellway PLC (LSE:BWY) up 4.2%, Vistry Group PLC (LSE:VTY) rising 3.9% and Taylor Wimpey PLC (LSE:TW.) adding 2.9%, while among the blue-chips, Barratt Redrow PLC (LSE:BTRW) and Persimmon PLC (LSE:PSN) both gained around 2.6% and Berkeley Group Holdings PLC (LSE:BKG) edged 1.3% higher.
Broker Stifel said the bond market had in recent days reacted to increases in domestic and automotive fuel prices, with expectations that the Bank of England could raise rates in reaction to this, which threatened to "at least slow house price inflation if it persists".
Analysts said the 17% fall in Bellway's shares yesterday appeared to be in response to a lowering of estimates "on macro-economic concerns".
The step-up in swap rates seen this month will at least slow house price inflation if it persists.