Wednesday 19 February 2020 3:35 pm

Housebuilders boosted by HSBC stock upgrade

Shares in housebuilding firms jumped today after HSBC upgraded its view on the stocks, saying the decisive general election result “unleashed pent-up demand” in activity. 

Berkeley’s share price rose 3.2 per cent to an all-time high this morning after HSBC upgraded the stock from “hold” to “buy”. 

The bank now has “buy” ratings on all nine of the listed housebuilders it covers, and it pointed to Barratt, Redrow, Bellway and Crest Nicholson as its “preferred picks”. 

Bellway’s shares jumped 1.94 per cent to 4,307p this afternoon, Redrow was up 1.91 per cent to 845.89p and shares in Crest Nicholson jumped 1.29 per cent to 517.61p. 

Barratt Developments’ stock was up 1.24 per cent. 

“The decisive General Election result has brought the prospect of a final settlement of Brexit closer and unleashed pent-up demand in housing activity that we are forecasting to induce a full year 2020 three per cent rise in UK-wide new home sales reservations,” HSBC analysts said. 

It added: “This election has sparked a rally in activity in the UK housing market”. 

In the note to investors, analysts said the election result could reverse “the southern England house price erosion that some housebuilders reported in autumn 2019”. 

Figures published this morning by the Office for National Statistics (ONS) reported that London house prices jumped 2.3 per cent to £484,000 in December – the fastest growth rate in 15 months. 

Meanwhile, the south east posted growth of 1.2 per cent, the UK’s lowest rate of growth.