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Persimmon and Barratt Developments among those flying higher after a triple dose of good news for the builders

A raft of broker upgrades, some Brexit cheer and the strong performance of one of the sector's minor players helped boost sentiment
builder installing roof
The sun appears to be shining on the new-build sector

The builders provided the market’s main excitement with a triple-dose of good news lifting the sector.

If demand for new build housing is sentiment-driven, then the mood recently has been dominated by Brexit.

READ: Help to Buy underpinning new-build boom, says Berenberg, as it urges investors to plough into housebuilders

So, the UK seemingly stepping away from a no-deal departure from the EU provided some support for listed groups such as Barratt Developments PLC (LON:BDEV), up 1.9%, and Taylor Wimpey PLC (LON:TW.), ahead 1.5%.

A note from HSBC, meanwhile, took a good look at the longer-term prospects of the quoted builders.

There was a raft of price target upgrades, while Persimmon PLC (LON:PSN), up 1.9%, and Bovis Homes PLC (LON:BVS), up 3.3%, were moved to ‘buy’ recommendations from ‘hold’ by the bank.

“We now see a lighter than we initially expected correction in southern England in 2019 for new house prices at 2.5-5%, based on recent evidence of a shift to house ownership from renting for 35-44-year-olds, which is also evident in housebuilders’ resilient sales rates, despite the Brexit consumer gloom,” HSBC told clients.

“We expect sustained low mortgage rates and the government Help-To-Buy equity loan scheme to maintain the market share gains of new homes.”

Finally, Crest Nicholson PLC (LON:CRST) provided a tonic as it said it had already secured 50% of its sales for the year.

The stock advanced 6.8% with the City doubly cheered by the news it had poached new boss Peter Truscott from rival Galliford Try plc (LON:GFRD).

Crest has also pressed the reset button on its strategy to focuses on shareholder returns by prioritising cash flow and dividends.

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