Contents
Softening the view 3
UK macro and housing indicators have generally outperformed our lowered
expectations in 2009, supported by government/central bank initiatives,
improvements in lending and restricted supply conditions. We alter our peak-totrough
house price view to -30% vs -35%.
3
Light at the end of the tunnel? 3
Words of caution 9
Conclusions/outlook 13
Altered price view reduces loss estimates 15
Company updates by UK housebuilders suggest a degree of stabilisation in recent
months. We expect further price erosion before the bottom, but our move to a
negative 30% peak-to-trough assumption (from negative 35%) leads to EPS
upgrades.
15
Recent company commentary 15
Price, volume, margin and earnings changes 15
Strategy considerations for less volatile markets 17
Valuation principles 24
Valuation working 28
Company profiles 38
Barratt Developments 38
Bellway 41
Berkeley Group 44
Bovis Homes 47
Persimmon 50
Redrow 53
Taylor Wimpey 56