Remember that minor referendum the UK had on EU membership at end-June? You’d almost be forgiven for forgetting it ever happened. The only thing that has really changed is the value of the pound while UK stocks have delivered a stellar 20% recovery to beyond pre-Brexit levels and a host of macro-economic data (inflation, jobs, retail sales) is painting a far-from-post-apocalyptic picture for the month of July. It’s probably still too early to say the doom-mongers were totally wrong – Brexit will after all be a glacially slow process; years rather than months – but there is one sector that may still be pricing in a crash that never materialises.

It’s not a Bank or a Miner which remain hostage to the hopes and fears surrounding global economic health. It’s a group of stocks linked to a market beloved of Brits, one they love talking about almost as much as the weather. Yes, you’ve guessed it. It’s the Housebuilders, whose shares are in recovery mode, a trend which may have plenty left in it. The likes of Barratt Developments (BDEV), Berkeley Group (BKG),. Taylor Wimpey (TW), Bovis Homes (BVS), Bellway (BWY), Persimmon (PSN), Redrow (RDW), Telford Homes (TFD), Galliford Try (GFRD) and many more.

Many of their share prices are still pricing in a nasty scenario for the UK property market, London and the south east in particular. Available data tends to be mixed and in some cases contradicting, measuring different things, but what we have seen thus far suggests anything but Armageddon. One builder even delivered a reverse profits warning, saying people were queuing up to buy! Prices may well pull back a notch, taking a breather, but it is unlikely that a collapse is imminent.

If anything, a weaker pound is offering foreigners an attractive discount for long-term investment in a market that most are convinced politicians will never allow collapse. Look at the low borrowing rates, myriad incentives and lack of real willingness to address the shortage of homes. Furthermore, shares were already in a 2016 decline in the run-up to the referendum based on risk, so recovery could even surpass the pre-Brexit levels.

Their dividends also remain extremely attractive (4-7% yield; among UK 100 top 10) for yield hunters that are being unfairly squeezed by central bank stimulus that means cash and bonds offer diddly squat. The security that cash and bonds offer is now in many cases even costing you with central banks charging for parking cash, banks cutting rates on accounts and trustworthy governments demanding you pay for the privilege of borrowing from them. The income from housebuilder shares also looks pretty safe thanks to cash on their balance sheets and several multi-year commitments to pay-out generously to loyal shareholders. The same may not be true everywhere else.

So if you are looking for a home for your money (pun entirely intended) you could do worse than considering a sector that has already delivered returns of 20-250% since their post-Brexit lows. One that is linked to a historically solid market. These are impressive returns for less than 8 weeks – even more so when you annualise it – but that doesn’t mean it should be written off as an opportunity missed. The foundations and first floor of a recovery may well have been laid and put up rather quickly. But the story could still have legs with most shares still around 20% cheaper that their pre-referendum levels.

Mike van Dulken, Head of Research, 19 Aug