UK housebuilding share prices have the potential for a hefty rebound, according to US bank Jefferies, which has upwardly tweaked its forecasts going forward as it becomes less gloomy.
Following the latest company updates, the US bank now sees order books as sufficient to push its worst-case forecasts out by at least six months to the second half of 2023.
Resilience in house pricing, meanwhile, provides enough comfort to amend its expectations for house prices to a fall of 7% from 10% previously.
Moreover, if current conditions prevail (known volume declines, flat pricing, and 7-8% build cost inflation) better earnings and returns on capital could spark a 30% sector wide share price rally.
Jefferies has 'buy' ratings on Taylor Wimpey ( target 154p), Bellway (2,661p), Redrow (650p), Vistry (987p) and Crest Nicholson (334p).
All of these have seen small upgrades due to Jefferies’ less bearish view of the immediate future.