The housing market remains in the early stages of a cyclical recovery led by modest home prices growth, recovery in mortgage approval numbers and revival sales activities at home builders’ development sites.
A continuous recovery in UK home prices will encourage the outlook for UK home builders. The evolution of home prices generally serves as a key indicator of home construction activities. The rise in home prices also provided much needed mitigation to profit margins for home builders, which remained under considerable pressure in 2024.
Persimmon’s Important Morning Star Metrics PSN
Analyst: Jack Fletcher Price
Persimmon will provide investors with the largest leverage for the UK housing market that is recovering as it was most affected by the sour UK housing market situation in 2023.
With ongoing housing affordability concerns and government targeting increased homeownership rates, Perimmon seems like a great opportunity to take advantage of this. The stock has been collecting 28% since April 9th, but Persimmon shares are traded at multiples/books/books of average 2.3 in previous residential cycles. At the current level, Perimmon’s stock price seems very likely to be a rewarding decade for major UK home builders.
Housing construction stocks under Morningstar coverage are undervalued
Since April 9, the five home builders covered by Morningstar have recovered at an average of 25%, and at Bellway Who is Leads the pack with a gain of 36%. But persimmon PSN This is Morning Star’s top pick for exposure to home builders.
It remains widely present throughout our coverage, along with all of our UK home builders.
This article is an edited version UK Home Builders: 2025 Q2 An industry report published on MorningStar Direct and written by Fletcher-Price. This article was edited by Christopher Johnson.
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