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Strong housebuilder updates get muted market reaction

Despite concerns around costs and interest rates, sector bulls can still make a good argument
July 14, 2021
  • Barratt, Persimmon and Redrow among companies to report
  • Sales and demand rise, though costs are climbing

Throughout June, shares in UK housebuilders were on the slide as signs of rising inflation sparked worry among investors that interest rates could climb faster than expected. Those concerns are yet to fade, judging by the tepid reception to positive trading updates across the sector in the past fortnight.

Persimmon (PSN), the largest listed player, captured the big theme when it said that sales in the six months to June had been ahead of comparative periods in both 2020 and 2019. Management told shareholders that house price growth had mitigated a rise in input costs, a trend it expects to continue over the coming months.

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