Housebuilder shares on the up following Rics update

• Taylor Wimpey and Barratt Developments shares are on the up today 

Housebuilder shares jumped on Thursday after fresh findings from the Royal Institution of Chartered Surveyors projected growing property sales in the latter months of 2023.

Taylor Wimpey and Barratt Developments shares were up by over 2 per cent this morning, but remain down on a year ago. 

Berkeley shares have also risen and were up 1.69 per cent or 71.00p to 4,269.00p this morning, having risen around 8 per cent in the past 12 months. 

Online property portal Rightmove has also seen its share price climb today, rising 1.97 per cent or 11p to 568.20p early trading, paring one-year losses back to around 12 per cent. 

In today’s update from Rics, survey respondents said that while property prices, sales volumes and buyer demand remained sluggish in March, the sales outlook for the latter part of the year looks more upbeat.  

Back in January, analysts at Liberum Capital said they expected to see 28 per cent upside in housebuilding shares on their central case that UK house prices fall by around 5 per cent this year. 

Liberum analysts said in January: ‘We are at the optimistic end of analysts’ forecasts as we don’t expect homeowners or developers to be forced sellers, the market remains undersupplied and employment is expected to hold up well.’

Towards the end of last month, Liberum analysts remained upbeat about the sector’s prospects, highlighting Bellway, Vistry and MJ Gleeson as its favoured picks.

In an update today for the half-year ending 31 March, property developer group Watkin Jones said it saw strong demand in the first half of fiscal 2023, adding that it expects to close a number of transactions in the second half. 

It said: ‘First half performance has been driven by our contractually secure forward sold developments which are on site. 

‘Project margins have been in line with the updated guidance given in January, with the exception of our scheme in Exeter where the Group has incurred certain additional costs following the liquidation of a contractor.’  

Watkin Jones said its underlying residential for rent market continued to perform well with both strong tenant demand and rental growth in its core sectors.

It added: ‘We are seeing appetite for forward funds continuing to recover and expect to close a number of transactions in our H2. We currently have five schemes either formally under offer or where we expect to appoint preferred bidders imminently.

‘As previously flagged, performance will be materially H2 weighted.’

The Aim-listed group said it had gross and net cash as at 31 March 2023 of  around £83million, against £45million in the first half of 2022. 

In September, Watkin Jones reported a ‘strong’ second-half operational performance, as it continued delivery across both its purpose-built student accommodation and build-to-rent development programmes, but market volatility saw it lower its guidance.

The group also cut jobs in the wake of the market turmoil caused by the mini-budget in September.

Bucking the upbeat share price reaction of others in the sector following today’s update from Rics , Watkins Jones shares were down 3.51 per cent or 3.37p to 92.53p this morning, having fallen over 64 per cent in the last year. 

The group’s interim results will be published on 23 May.