Hopes that the Bank of England's base interest rate has peaked and with it, mortgage rates, have seen housebuilders stage a rally in recent weeks.
Other things going their way have been planning law changes and an easing of material cost inflation, but updates next week from three of the UK’s top builders will see if the recent optimism is premature.
Persimmon gets the ball rolling. UBS says sales rates so far in the second half will be the thing to watch for.
The Swiss bank expects a low number on this score at around 0.40 (ex-bulk) between August and the first week of October.
For calendar 2023 UBS expects sales volumes to fall by 39% to 9,061 (guidance: at least 9,000), average selling prices to rise a touch to £255,000 and pre-ex pre-tax profits of £ 335 million.
Taylor Wimpey’s order book is key for UBS with, like Persimmon, the builder set report sales rates have remained soft.
The builder last reported a sales rate of 0.47 in July.
For 2023, UBS is forecasting TW's sales to decline 25% y/y to 10,250, average prices of £316,00 and underlying profits of £457m pr almost smack in line with consensus.
Finally, Redrow reported a private sales rate of 0.34 in the ten weeks from 1 July.
In the year to next June, UBS expects sales volumes to decline 19% y/y to 4,427 with a 0.46 sales rate, prices at £379,000 and underlying pre-tax profits of £187m.