Housebuilders are expected to avoid any significant share price tumbles ahead of a forecast house price plunge in the UK, according to analysts at brokerage Jefferies.
In a research note today, Jefferies analysts doubled down on UK housebuilders continuing to bring value for shareholders, despite an anticipated dip in house prices and sales as mortgage rates rise.
Last week, the Office for Budget Responsibility (OBR) forecast house prices in the UK to tumble nine per cent over the next two years.
However, Jefferies has cautioned that the hit to the market could be worse – with property costs potentially slipping between nine and 20 per cent in the coming years.
A number of FTSE housebuilders have appeared sheepish on their outlook for the coming months, as the country dives into a recession.
“Despite the recent bounce in the stock prices, and while still nervous around news flow near term, we see strong value available,” wrote analysts.
“Current share prices we calculate reflect not just 20 per cent decline in volumes but also 9-20 per cent house price decline compared to OBR view of -9 per cent.”
Analysts at the firm have kept most of the country’s biggest housebuilders, listed in London, firmly within its buy rating.