Are any of Britain’s biggest housebuilders still worth investing in?

Investors had a mixed response to the proposed £1bn merger of housebuilders Bovis Homes and Galliford Try. This is the second time the pair have attempted a tie-up this year amid an uncertain outlook for British developers.

The economy is stuttering, house prices have stopped rising and Brexit uncertainty sweeps the nation. Listed developers have returned less than the London market as a whole since the Brexit vote, raising questions over the value of the sector.

However, some companies now look cheap relative to other traded stocks. So which of the largest

housebuilders are worth investing in?

Barratt Developments’ share price has done well since the Brexit vote, rising by 42pc. In May the £6.4bn company raised its sales forecasts for the year – something its rivals have not managed. Barratt has enjoyed booming profits over the past five years and analysts at Liberum, a broker, said it expected this to continue. However, investors should note that the share prise has risen more than those of its peers and the stock is not the cheapest. The analysts suggested the shares were fine to keep if already owned, but not worth buying now.

Taylor Wimpey’s share price has failed to rise in line with peers since June 2016 and has fallen by 17pc, leading to a dividend yield of 10.8pc.

It expects to sell more homes but higher costs will hit margins and profits. This means there is little scope for the share price to rise more quickly than peers’ or the market average in the short term. However, the share price is so low that many believe it undervalues the company – meaning there is potential for good returns for investors willing to wait until the shares catch up.

Bellway has sold more houses than expected but has also warned higher construction costs will affect profits. Investors have done well since the Brexit vote, with the share price up by 15pc, but it has long struggled to deal with rising costs and falling sales. For a risk-taking investor, though, it is cheaper than the market average and worth a punt.

Redrow has performed well since the Brexit vote, with its shares 35pc higher. It beat expectations and reported a 7pc rise in profits this year, although its profit margin fell. Its shares yield 5.1pc and remain cheap versus the market, offering returns potential.