Housebuilding shares were on the up on Thursday as data showed signs of improvement in the housing market.
Barratt Developments PLC (LON:BDEV) was the top riser in the FTSE 100, up 3.4% to 604.2p, with fellow blue chip builders Taylor Wimpey PLC (LON:TW.), Persimmon PLC (LON:PSN) and Berkeley Group Holdings PLC (LON:BKG) not far behind.
A survey from the Royal Institution of Chartered Surveyors released overnight showed the headline prices balance at the highest level since last August, rising to -1 from -9.
June’s RICS report also showed interest among buyers rose for the first time since November 2016, and that prices had risen outside of London and the south-east of England.
The survey comes fresh on the back of some positive company updates from the sector’s biggest players, with Barratt having said in Wednesday’s trading statement that pre-tax profit was likely to be ahead of previous market expectations and a day earlier Bovis Homes PLC (LON:BVS) reported a step up in the sales rate.
“Although it is too early to call a bounce-back in the property market based on one set of data, the news does offer a glimmer of hope for investors in housebuilding stocks,” said Russ Mould, investment director at AJ Bell.
He said management of these companies will be rejoicing at the RICS survey as many of them had not too long ago indicated their best days were over in the current market cycle and that life was getting tougher.
Investors also jumped on the back of estate agents following the RICS data as a new lease of life in the market should also benefit sales transaction volumes.