Analysts at Citi sounded a ‘bullish’ note for select UK homebuilders as funding negotiations on legacy cladding concluded.
Persimmon, Berkeley Group and Taylor Wimpey had all pledged to fix safety issues on historic buildings going as far back as 30 years and other builders were expected to follow suit.
On the other hand, funding for so-called orphan buildings would not be finished until later in the year.
Hence, the discount at which the sector was trading might not reverse at the current stage, Citi conceded.
Yet investors should be partly comforted by the fact that the bulk of those costs would now be reflected in estimates, the analysts said.
Furthermore, now that homebuilders were on an equal footing, on a 12-month view, the broker saw scope for a relative re-rating on growth prospects for the likes of Bellway, Taylor Wimpey and Barratt Developments.
