You might not guess this from market sentiment or recent press commentary. But new housebuilding starts have risen by more than 50% from the lows seen in late 2023:
Source: Building Cost Information Service
Government data on brick deliveries also shows a very similar pattern, with monthly brick deliveries around 25% above the low point seen in late 2023:
Source: Department for Business & Trade statistics Aug 25
It’s clear that deliveries are still a long way below the levels seen when the Help to Buy boom was in full swing. But even so, the trend seems positive.
Recent guidance Industry forecasts suggest this recovery could continue into 2026.
A selection of listed housebuilders expect to see their new home completions rise by 5%-6% in the FY26 financial year (although beware, most others have not yet provided guidance):
Persimmon (LON:PSN): expect completions to rise by 6.7% to “c.12,000”
Bellway (LON:BWY): recent guidance for volumes to rise by 5.2% to “around 9,200 homes”
Barratt Redrow (LON:BTRW): expects FY26 home completions in a range of 17,200 to 17,800 – taking the mid-point gives an increase of 5.6%
These firms accounted for around 40% of UK homes built in 2024, so should be a reasonable guide to expectations for brick demand – albeit I think they’re among the best-performing listed companies in this sector at the moment.
More broadly, recent industry forecasts from the Construction Products Association suggest total construction output could rise by 3.7% in 2026, with a 7% increase in private housebuilding.
Why brick producers - and why not housebuilders?
Brick producers carry high fixed costs but can benefit from strong operating leverage – reflected in peak profits – when demand rises and they can run their factories close to capacity.
If volumes do continue to recover as we head into 2026, then I think these businesses could be well positioned to benefit. In the remainder of this article I’ll take a closer look at the three companies I’ve mentioned above.
Before that, I just want to offer some brief comments on housebuilders – after all, in the scenario I’m suggesting, they could also…
