It is “Christmas come early” for UK housebuilders, says Anthony Codling, managing director at the broker RBC Capital Markets.
We believe that those with most exposure to the south and south east (Crest Nicholson) and the more liquid stocks (Barratt Redrow, Persimmon and Taylor Wimpey) will outperform, and those with the least exposure to open market homes (Vistry) and homes likely to be priced above the Your First Home price cap (Berkeley) to underperform on a relative basis.
That said, we believe this is the big catalyst the sector as a whole needed for a re-rating, and whilst most of us have 88 sleeps to Christmas, Christmas has come early for the UK housebuilders.
Shares in building material suppliers are also joining housebuilders in their market rally this morning – brick-maker Ibstock has jumped 21%, while Marshalls, which makes hard landscaping and building products, is up 12% this morning.
Construction material suppliers Forterra and Breedon are up 14% and 9% respectively. Topps Tiles is up 6%.
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