SHARES in Crest Nicholson shed more than a third of their value on Tuesday after the housebuilder warned it would struggle to break even this year.

The FTSE 100 housebuilder blamed "macro uncertainty" wrought by the war in the Middle East, which it said had dented buyer sentiment and pushed up borrowing and building costs.

The surprise update triggered a brutal rout in Crest's shares, the value of which had more than halved at one point in yesterday's session before the builder recovered some of those losses to close 35 per cent down.

The property giant said it would now deliver fewer houses this year, and was unlikely to agree as many land sales. Top brass to the indebted firm have also kicked off talks with lenders in a bid to secure "temporary banking covenant relaxation".

"It is increasingly clear that the current macroeconomic uncertainty is contributing to the prospect of a more prolonged higher interest rate environment, renewed cost pressures and a deterioration in consumer confidence," boss Martyn Clark said.

"Therefore, in the near term the right and prudent course of action is to adapt quickly to the challenges presented by the current trading environment and focus on prioritising cash generation and optimising our balance sheet position."

Analysts at Peel Hunt said the earnings guidance points to pretax profits being "well below" the current consensus for £33m.

The update adds to a slew of negative news around the UK's beleaguered housebuilding sector, the success of which is highly correlated to the interest rate outlook. Last week, London-listed Berkeley said it had paused all new land buying and hiring to contain the negative fallout of the Iran war.

(c) 2026 City A.M., source Newspaper