The share prices of Wimpey, Taylor Woodrow and Persimmon – housebuilding's big three – are near year-highs, and the prospects for further increases are good. And all three have made acquisitions in the past year that significantly increased output and market shares.
The firms now account for almost 30% of the UK new-build market – very attractive to investors who have been complaining since Roman times that the sector was too fragmented.
"The big are definitely getting bigger and that's what the City likes," said one analyst. "It gives them the critical mass they lacked before, but even after these deals they are still very small companies compared with the wider market. This fact will mean more mergers."
The City's respect for the big boys has caused a rise in Persimmon's share price to 456p – not far from its year-high of 484p and a huge distance from its year-low of 238p. Wimpey, at 300p, is twice as high as its year-low and only 30p from its peak. As for Taylor Woodrow, it was only 5p off its year-high this week at 217p, and its low was 134p. The City is still waiting to see what new chief executive Iain Napier plans for the group.
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