Several big players in the homebuilding industry have seen their shares rally on the announcement that the Conservative Party had won the 2019 election.
In the FTSE 100 (INDEXFTSE: UKX), Taylor Wimpey (LON: TW) saw their shares rally 14.88% to 200p.
At the end of November, Wimpey reported strong second half demand for their housebuilding services, despite tough market trading conditions. Britains third largest homebuilder gave shareholders reassurance that they were not going to let Brexit complications and external market issues affect trading.
Berkeley Group Holdings PLC (LON: BKG) shares spiked 13.06% to 5,102p. Last week, Berkeley saw their shares in green despite a timid update.
Berkeley sources three quarters of its revenue from London, set a pretax profit aim of £3.3 billion over the six years to 2025. The firm expected profits to be within the £500 million and £700 million guidance in any one year. The company, which operates primarily in London, Birmingham and the South of England, said pretax profit fell 31% to 276.7 million pounds ($355.01 million) for the six months ended Oct. 31.
Barratt Developments Plc (LON: BDEV) shares rose 12.52% to 755p. In October, the firm saw sales slip amid tough market conditions.
Barratt said they expect the volume of house sales to grow toward the end of the of their medium-long term target range of 3-5% annually. Total sales rose to 12,963 units from 12,903 earlier this year. However, this was offset by a fall in the value of these homes by 2.4% to £3.07 billion.
Finally Persimmon plc (LON: PSN) shares have rocketed 11.01% to 2,790p. At the start of November, Persimmon reported that Summer trading had met expectations, and this was down to robust trading and consumer resilience.
In the second half of 2019, Persimmon commented on the ‘resilient’ trading patterns alluding to full sale allocations for the year. Around £950 million of forward sales are secured beyond 2019, compared to £987 million this time a year ago.
Analysts at Peel Hunt commented: “It’s difficult not to see the election result as a healthy boost for the whole UK building sector. Stalled commercial projects should now get going, while more clarity on Brexit should give consumers a bit more confidence to be more active in the housing market, as well as get going on some renovation projects. We suspect the new housing market will be the first to see the benefits, with a pick-up in volumes and house prices as the traditional spring season gets off to an early start. Tax and spend changes in the likely February budget should provide some further good news for the sector.”
