The common factor across the latest trading updates from the big housebuilders is they are all forecasting fewer completions and land purchases this year.

That could spell trouble for the various trades which support the new-build home industry, from legal services to building materials and equipment hire to fitted kitchens and bathrooms.

With mortgage costs soaring after repeated interest rate increases, piling more pressure on already-stretched household budgets, the housebuilders have all flagged a sharp slowdown in reservations in the final quarter of last year together with rising cancellations.

Barratt Developments (BDEV) says unless there is a rebound in reservations this Spring it will deliver between 6% and 9% fewer new homes than previously expected in the year to June.

Moreover, it has approved just 16 new sites while cancelling 22 previously approved sites meaning a net drop of six sites and 290 plots.

Persimmon (PSN) says it is starting 2023 with private forward sales of just £500 million against £1.1 billion a year ago and it has no idea when demand will recover.

Taylor Wimpey (TW.) says sales were ‘significantly’ lower in the final quarter of 2022 and expects volumes to reduce this year, while at the same time it is being ‘highly selective’ in acquiring new plots.

All of which is likely to ring alarm bells at firms which service the new-build housing market, particularly after the slowdown in the repair, maintenance and improvement market which Shares noted last October.

Legal services firm Gateley (GTLY:AIM) carries out work connected to the new-build housing industry, and in the past year has increased its exposure to the property sector, so a downturn in activity could have a negative effect on its earnings.

Building materials groups such as Brickability (BRCK:AIM), Ibstock (IBST), Marshalls (MSLH) and SIG (SHI) – the last of which has already seen one of its big UK customers, roofing contractor Avonside, go into administration – could also be affected by a slowdown in new home building.

Equipment rental firms like Speedy Hire (SDY) and HSS (HSS), and builders’ merchants such as Travis Perkins (TPK) and Wickes (WIX), who have already taken a hit due to the drop in repair, maintenance and improvement activity, could be similarly impacted.

Even firms which make goods such as radiators, boilers, or bathroom and kitchen equipment, such as Norcros (NXR), Stelrad (SRAD) and Howden Joinery (HWDN), may find themselves exposed if the downturn in new build activity already hinted at becomes more widespread in the coming months.

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