Reasons to be optimistic about UK housebuilders

Investors in the UK housebuilding sector have enjoyed exceptional returns since the Global Financial Crisis and 2019 was no different, with average total returns including dividends of 53%.

Given negligible earnings growth over the year, this re-rating can be ascribed to sterling appreciation, the reduced prospect of a hard Brexit outcome and the Conservative majority win in the General Election. Facing ongoing political uncertainty regarding the UK's eventual exit from the EU and historically high valuations, investors might be tempted to take profits. However, we still see plenty of reasons to be optimistic about housebuilder returns for the year ahead.  General Election reaction: Market 'fanfare' may be short-lived Market fundamentals continue to be supportive. Hou...