Jefferies has upgraded Barratt Redrow PLC (LSE:BTRW) and Crest Nicholson Holdings PLC to 'buy' in its latest assessment of the UK housebuilding sector.
The change of stance from the broker highlights renewed optimism as trading improves and government support for the housing market remains robust, as other brokers have also highlighted in recent days.
Notably, Taylor Wimpey PLC (LSE:TW.), Persimmon PLC (LSE:PSN), and Bellway PLC (LSE:BWY) retain their positions as "top picks", reflecting confidence in their ability to capitalise on market opportunities.
In addition to company-specific upgrades, Jefferies points to broader market dynamics influencing the construction industry.
A projected 3% rebound in UK residential new build volumes for 2025 marks a potential inflexion point, though this remains 22% below 2021 levels.
Analysts cited government policy as a key driver, with supply-side measures already implemented and further demand-side support anticipated.
They also anticipate constrained RMI (repair, maintenance, and improvement) growth relative to new builds, positioning high-quality names like Howdens as strategic holds.
On pricing and margins, the note highlighted cost inflation but notes strong operational leverage and product mix improvements could drive surprises. For investors, these factors suggest potential value in a market still navigating recovery.
Barratt shares were 3% higher, while Crest Nicholson was ahead 1.75%.