TD Waterhouse’s latest customer activity shows that investors are turning towards housebuilders, with Barratt and Taylor Wimpey entering its top 10 buys.

Angus Rigby, chief executive officer of TD Waterhouse, said: “As the credit crunch takes its toll on mortgage lenders and first-time buyers, housebuilders are also feeling the effects following concerns that we could see the worst downturn since the housing slump of the early 1990s.

“Last week, York-based Persimmon, one of the UK’s biggest housebuilders, announced a halt on the building of new sites until conditions improved, while back in February, Barratt Developments was at the centre of speculation that it would have to tap investors for cash to help reduce its £1.73bn of debt.

“Although the rumours were refuted, the share price was negatively affected and rival firm Taylor Wimpey has also suffered in recent weeks. As the country’s largest housebuilder by volume, shares in the company fell by more than 10% last week, driven by the less-than-confident statement about cautious trading in 2008.”

Rigby said the appearance of both stocks in this week’s top 10 buys indicates that TD Waterhouse’s customers are confident that at these reduced prices, housebuilders could still turn the corner and offer some good value over the longer term.