UK Housebuilding: Another year of margin headwinds

研报英文原文证据摘录

UK Housebuilding: Another year of margin headwinds

Equity Research

19 May 2026

UK Housebuilding

Another year of margin headwinds

Our new 2027 estimates are c25% below BBG consensus

driven by a 6% cost inflation estimate. Our "what's priced in?"

analysis and scope for government support stop us from UK Housebuilding & Construction NEUTRAL

Unchangedbeing more bearish on valuation, although downside risks

around pricing exist. We downgrade BTRW and BWY to EW; UK Housebuilding & Construction

Emily Biddulph

BKG our only OW. +44 (0)20 3555 2947

emily.biddulph@barclays.com

Barclays, UK

The UK Housebuilders are facing a second wave of likely high cost inflation and potentially

waning demand, in the space of three years. Average operating margins have already almost Shruti Hanumant Dhumal

halved since 2022 (11% in 2025 vs 20% in 2022). Even before the Middle East conflict began, a +91 (0)22 6175 1786

shrutiha.dhumal@barclays.comlack of HPI suggested that price/cost was likely to be slightly negative for 2026. While we had

been expecting recovery in margins from 2027, supported by improving land margin mix and

lower rates supporting modest HPI and neutral price/cost, the outlook for higher cost inflation

and higher rates constraining pricing means we now expect means we now forecast lower

margins y/y in 26/27.

Our new estimates are an average of 25% below Bloomberg consensus for 2027: Our base

case is that pricing is flat, while build costs increase by 6% over the next 12 months (an

incremental 2% on top of most recent guidance from companies commenting at Q1).

However, stocks are already pricing in our base case forecasts: While our estimates are

materially below Bloomberg consensus, after a ~30% share price decline in March, we think

stocks are already pricing in downgrades.