Canaccord upgrades Taylor Wimpey to 'buy', expects special dividends to resume in 2022

In a research note sent to clients, analyst Aynsley Lammin also said that the key issue for the homebuilder were the existing macroeconomic risks and the outlook for home sales and prices in 2021.

Lammin said recent trends were "encouraging" although the test of rising unemployment "had yet to be fully felt".

His estimates called for delivery volumes to run at 80% of 2019 levels next year with pricing broadly holding up.

He also expected that special dividends would resume in 2022 with a final payout for 2020 also on the cards, although he expected the latter to be paid in 2021.

Therefore, he said "the investment case reverts to one of growth combined with attractive capital returns."

Lammin did however trim his target price on the shares from 165.0p to 160.0p.

"The balance sheet is in good shape post the recent equity raise and the Group has now successfully reopened all sites and is seeing good demand (a price increase of +1% was even put through in July)," he said.

"Given the H1 result, we now expect lower profits for the full year, but the pattern for recovery and forecasts for 2021 remain broadly as expected."