Barclays upgrades Persimmon, Taylor Wimpey

Barclays noted the stamp duty holiday and Help to Buy scheme have boosted demand for housing across most of the UK.

"While rising unemployment cannot be ignored, we see the sharp fall in mortgage availability as a greater near-term risk to transaction levels and profitability," it said. "We expect ongoing Government support for housing and a potential mortgage indemnity scheme could help offset the current mortgage shortage without being a material drag on sector returns."

For 2021, it said the earnings recovery is underpinned by strong order books and that dividends are likely to resume.

"We continue to see value in the sector, with an average of 12% potential upside to our price targets."

The bank upped Persimmon and Taylor Wimpey to ‘overweight’ from ‘equalweight’ and increased the target prices to 3,000p from 2,800p and to 170p from 160p, respectively.

It downgraded Barratt and Crest to ‘equalweight’ from ‘overweight’; it bumped up its price target on the former to 725p from 580p and kept the target price on the latter at 335p.

Barclays maintained its ‘overweight’ ratings on Countryside Properties and Redrow, lifting the target prices to 510p from 500p and to 645p from 600p. Berkeley was kept at ‘underweight’ but the price target was reduced to 3,990p from 4,180p.