viewBarratt Developments

UK housebuilders should enjoy another strong year, says Citi


Despite its strong performance in 2013, Citi reckons there is still room for more medium term growth in the UK housebuilding sector.

It is benefitting from a continued recovery against a "relatively favourable" macro economic backdrop, reckons analyst Aynsley Lammin, which notes the sector was up around 55% in absolute terms last year.

Citi currently rates Barratt (LON:BDEV), Bellway (LON:BWY), Bovis (LON:BVS) and Persimmon (LON:PSN) as 'buys' with Taylor Wimpey (LON:TW.), Berkeley Group (LON:BKG) and Redrow (LON:RDW) as 'neutral'.

The US broker assumes underlying house price inflation of plus 3% and plus 4% in 2014 and 2015, respectively, with strong order books and sales rates supporting volumes.

"The next news-flow for the sector is the trading updates in early January.

"The next big catalyst for the sector will be signs of how the important spring 2014 selling season is unfolding and to what extent Help to Buy 2 is boosting the market," notes Lammin.

Quick facts: Barratt Developments

Price: 490.3 GBX

Market: LSE
Market Cap: £4.99 billion

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