5th Jul 2024 15:22
(Alliance News) - The Labour Party's win in the general election could bode well for listed UK housebuilders should pledges turn into policy, analysts at RBC Capital Markets said on Friday.
In London's FTSE 100, four of the top five risers were housebuilders, Barratt Developments PLC, Vistry Group PLC, Persimmon PLC and Taylor Wimpey PLC. Berkeley Group Holdings PLC was another strong performer.
RBC noted the Labour Party has "big plans" for housebuilding and today is more than just a new day in housebuilding, "it is the dawning of a new age."
The broker said in the next 100 days "we are likely to see the reinstatement of housing targets, the refining of greenbelt and the reform of planning, and by the end of the year the newest version of Labour may have announced a new generation of new towns."
RBC thinks over the last few years housebuilders' potential has been hamstrung, but over the next few "this potential is likely to be unleashed".
"If the new government's walk matches its talk we expect the sector to re-rate, and in the very short term we suspect that the talk alone will be enough to lift share prices."
RBC thinks all housebuilders benefit from the anticipated changes, with the biggest winners set to be Taylor Wimpey, Persimmon and Vistry.
The broker thinks Labour's "bold plans", and "bold promises" on housing supply and planning reform set the scene for a period of significant growth in the supply of new homes.
"Houses, like Rome, are not built in a day, but policy changes made now should have a significant and far-reaching impact on the future," RBC believes.
Labour plans to reinstate housing targets and is seeking to facilitate the building of 1.5 million new homes over the course of the next parliament.
RBC thinks volumes are likely to be weighted towards the second half as policy changes will take time to impact supply.
By Jeremy Cutler, Alliance News reporter
Comments and questions to [email protected]
Copyright 2024 Alliance News Ltd. All Rights reserved.
Related Shares:
PersimmonVistry GrpBerkeley GroupTaylor WimpeyBarratt Developments