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The Markets
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Coverage of London’s small caps continues on proactiveinvestors.com
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The Markets
by Proactive
Proactive UK has moved.
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The Markets
by Proactive
Proactive UK has moved.
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Real Estate

Build cost inflation in focus ahead of updates from Taylor Wimpey, Persimmon and others

Housebuilders are set to update the market next week, with build cost inflation expected to dominate the agenda.

Trading statements from Taylor Wimpey PLC (LSE:TW.), Persimmon PLC (LSE:PSN) and MJ Gleeson (LSE:GLE) are due, with the first two likely to revise full-year guidance.

Analysts expect little change in underlying demand, which has remained more resilient than feared.

According to Stifel, buyers have continued to access relatively cheaper mortgage products, including tracker rates of around 4%, helping to support activity despite wider market uncertainty.

The focus instead is likely to fall on rising construction costs. Manufacturers have already notified price increases across a range of materials, in some cases as high as 30%, particularly in plastics and insulation.

Stifel estimates build cost inflation could accelerate to around 4.5%, up from roughly 2.0%, driven by higher energy and oil-related input costs from the Iran war.

That pressure is expected to weigh on margins, even if selling prices remain broadly stable.

Share prices across the sector have already fallen sharply, down around 27% since the recent geopolitical shock, suggesting markets are factoring in weaker profitability ahead.

Even so, analysts note valuations are now near multi-year lows, leaving scope for recovery if cost pressures ease and mortgage rates fall.

A busy run of updates starts on 28 April with Taylor Wimpey and Howden, followed by Breedon on 29 April and a cluster on 30 April including Persimmon, SIG and SigmaRoc.

Attention then turns to MJ Gleeson on 1 May, with a second wave in mid-May from Vistry and Marshalls (13 May), Eurocell (14 May) and Grafton (15 May).

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