A little over half of FTSE 100 companies on the UK stock market are down 10% (or more) in the past month.
Technically, that only counts as a ‘correction,’ but I can’t help wondering: is this the first tremor before a full‑on crash?
Homebuilders hit hard
Two of the hardest‑hit names are property builders Barratt Redrow (LSE: BTRW) and Persimmon. Barratt has slipped around 30.5% in a month, while Persimmon is roughly 29.9% lower.
On the surface, that looks worrying, especially for anyone who remembers how badly the 2008 financial crisis hammered the housing market. Back then, builders and banks crashed as home prices collapsed and credit dried up. But today’s backdrop is very different.
House prices are still rising, but more slowly: the UK average stood at about £270,000 in late 2025, up around 2.4% over the previous year. That is far removed from the sharp falls seen in 2008. Builders are also dealing with higher interest rates, affordability pressures and a backlog of supply.
Altogether, the economic environment has made buyers more cautious – but are there opportunities for value investors?
What the numbers say
Barratt exhibits solid revenue growth in recent earnings, but its profits remain thin and it’s still integrating the Redrow acquisition. Extending a sharp price drop from its 52‑week high, it lost almost a third in the last month alone.
That kind of bargain appeals to value investors, but suggests markets worry about execution risk. If costs continue to rise and consumer confidence falters, there’s a real risk that profits could take a further beating.
As a cyclical stock, it’s likely to rebound hard when sentiment improves – but can also fall fast if sentiment turns. For value investors willing to endure some short-term pain for a potentially large payoff, I think it’s worth considering.
Persimmon, meanwhile, has posted stronger annual profits and a solid operating margin, with completions rising and revenue climbing to around £3.75bn.
Even so, its share price has still fallen sharply over the past year. Investors worry that the housing cycle may be peaking and that higher mortgage rates could slow demand further. If they stay high for too long, buyers may pull back, hurting profits and further pressuring share prices.
Like Barratt, the low price looks attractive but has actually outpaced earnings growth by 1.8 times. Once this improves, things could get interesting, but for now, it remains firmly on my watchlist.
Is the UK heading for a crash?
The FTSE 100 as a whole is only a few percentage points off a correction. Still, that’s well short of what’s considered a crash (a 20%+ drop). Yes, the UK economy is slowing but inflation is easing and house prices are still rising modestly – that’s not the same picture as 2008.
Still, a sharp fall isn’t entirely ruled out. However, if the stock market does crash, it would more likely be triggered by a big external shock than by a 2008‑style housing meltdown.
For investors, the best preparation is simple: keep a diversified portfolio, avoid loading up on one sector, and ensure you have cash or safer assets to weather a downturn.
If you’re investing for the long term, a market correction can also create opportunities – just choose sensible allocations and never invest money you might need in the next few years.
