Housebuilders 'plan share issue'

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Two of the UK's largest housebuilders are set to announce rights issues to bolster their recession-ravaged balance sheets, reports suggest.

Barratt is planning to raise £700m while Redrow is aiming for £150m, several newspapers are reporting.

Four housebuilders have already tapped the market for cash this year.

The recession has hit the volume of home sales, dented selling prices and slashed values of land. Shares in housebuilders have plunged as a result.

Stabilising signs

In May, Taylor Wimpey raised £510m while Bovis, Berkeley Group and Bellway raised between £49m and £60m each.

If Redrow and Barratt also went for new investment, this would leave only Persimmon among the major housebuilders not to have made such a move.

Earlier this month, Redrow reported its worst set of annual results - reporting a pre-tax loss of £140.8m.

But in a sign that the property market is stabilising, it said it did not foresee further write-downs.

Although house prices have rallied slightly in recent months, they have fallen by up to 20% in some regions, surveys by Nationwide and Halifax have found.