Housebuilders shaky as boom seen slowing

SCATTERED falls were seen in shares of the big housebuilders today following publication of a report forecasting that the increase in house prices next year will be almost half the level achieved this year.

The slowdown in the booming housing market is predicted by the Royal Institution of Chartered Surveyors, which says prices will grow by just 6% compared with 10% this year. Mortgage lender Halifax is forecasting growth will slow to just 5%.

The slowdown in the economy is also likely to see a drop in the number of housing transactions completed - until the summer at the earliest - as interest rates start to rise again. The RICS predicts 1.4 million properties will be sold in 2002, down 2% on the previous year. Persimmon reacted to the news with a drop of 12p to 370p. There were also falls in John Laing, down 31/2p to 151 1/2p, Alfred McAlpine, off 2 1/2p to 430p, McCarthy & Stone, 2p adrift at 281 1/ 2p and Fairbriar, off 5p at 58 1/2p.

Elsewhere, investors who bothered to return from the Christmas festivities appeared to be in good spirit. Share prices were marked higher from the outset but traded below their best levels. The FTSE 100 index rose 17.5 to 5194.9. Turnover levels were the lowest of the year. By lunchtime a total of 225 million shares had been traded - less than the average daily turnover in Vodafone, up 1 3/4p at 180 3/ 4p as 29 million shares changed hands. It has been estimated that attendance levels at City firms were down 75% on normal.

The big retailers had a mixed appearance despite reports of record spending over the holiday break and in the run-up to the New Year sales, which are expected to see spending top 13 billion. Dixons firmed 1 3/4p to 238p while JJB Sports added 1 1/2p to 450p and fashion chain French Connection put on 2 1/2p to 810p.

Best performer among the top 100 companies-this year has been Marks & Spencer, 1/4p better at 357 3/4p, having raced up from its low point of 186p in January. Brokers say there has been evidence during the period before Christmas that the troubled stores group is starting to win back some of its customers.

A few punters were doing the rounds in Marconi, with the price rising 1/2p to 42 1/4p as more than 12 million shares changed hands. The group last week made a number of important disposals that were well-received by the City.

Analysts say Marconi is on target to raise more than 500 million from deals within the next few weeks, and that will go some way to reducing its debt mountain of about 4 billion.

Oil shares were firmer ahead of tomorrow's meeting of Opec ministers, who are expected to sanction cuts in production of 1.5 million barrels a day in order to strengthen the price following recent weakness-BP hardened 2p to 532p and Shell put on 3p to 478 1/ 2p.

It looks like being a gloomy start to the New Year for the boys and girls at Teather & Greenwood. Shares in the broker slumped 5p to 85p following its recent fine. Private-client brokers such as Teathers have been having a rough time because of the stock market downturn and this is almost certain to be reflected in annual bonuses, or the lack of them.

South African financial services group Old Mutual, which bought private-client brokers Greig Middleton and Albert E Sharp, was one of the biggest fallers among blue-chips, losing 2 1/2p to 85p.

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