Berkeley Group set to drop out of FTSE 100

Brick laying

Housebuilder Berkeley Group will drop out of the FTSE 100 share index after losing around 20% of its share value since the Brexit vote.

All UK housebuilders have seen their shares fall on worries of a slump in the housing market.

Berkeley Group will be replaced by Russian gold and silver miner Polymetal in the index.

Gold is seen as a safe investment in times of uncertainty, and its price has risen 25% this year.

Silver prices are up about 30%, and the rally in precious metals has helped to push shares in Polymetal up by more than 90% this year.

The changes to the FTSE 100 were confirmed after Wednesday's close of the stock market and will take effect on 19 September.

The FTSE 100 is currently higher than the level it stood at ahead of the UK's referendum on EU membership. The globally-focused companies that dominate the index have had a lift from the post-referendum drop in sterling, which typically boosts exporters.

However, housebuilders such as Berkeley and its rivals are more exposed to any weakening in the domestic UK economy.

Among the recent housing market data, Nationwide said on Wednesday that there was slight pick-up in house price growth in August. However, the lender said demand from buyers had softened, and price growth was being maintained by the low numbers of properties coming onto the market.

On Tuesday the Bank of England said mortgage approvals in July were at their lowest since January 2015.

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