The UK housebuilders limp into 2026 after another bruising year, flat year-to-date against a FTSE 100 up 19%.
The sector’s split personality is striking: the strongest names in JPMorgan’s coverage are up around 14%, while the laggards are down 10% on average.
But the bank’s 2026 outlook is cautiously optimistic, grounded in a clearer macro picture and a slow thaw in buyer sentiment.
First, affordability is easing. Mortgage rates have fallen about 40 basis points since January, with JPMorgan’s economists expecting three rate cuts, including one in December.
That alone loosens the brakes on demand. Second, the government’s long-trailed planning and supply-side reforms should start to bite next year as local authorities complete the messy transition period. The forthcoming Planning and Infrastructure Bill, close to Royal Assent, adds further momentum.
The analysts also see pent-up demand beginning to unlock after months of “wait and see” behaviour triggered by Budget uncertainty.
A more settled political backdrop would help: key fiscal events through 2024 and 2025 injected volatility into what is already one of the economy’s most sentiment-driven sectors. With local elections looming in 2026, JPMorgan notes that demand stimulus cannot be ruled out.
Crucially, valuations offer a safety net. Housebuilders trade at roughly 0.9x price-to-tangible NAV, a 30% discount to long-term averages, giving fundamentals room to reassert themselves if volumes stabilise.
Stockwise, JPMorgan sticks with its overweights on Persimmon (Top Pick), Bellway and Barratt Redrow. It remains Neutral on Berkeley Group, Taylor Wimpey, Crest Nicholson and Vistry, arguing that selectivity (so, not blanket bullishness) is the right call for a market still rebuilding confidence.