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Looking for the best FTSE 100 shares to buy and hold over the long term? Here are two I hold in my own portfolio and think are worth considering.
Building large returns
Taylor Wimpey (LSE:TW) faces extreme near-term uncertainty as the UK economy toils. But helped by further support from mortgage lenders — and the likelihood of additional interest rate cuts from the Bank of England — I’m optimistic its slow recovery should continue.
I’m especially hopeful as intensifying competition in the home loans market supports buyer affordability. Latest Moneyfacts data shows the number of higher loan-to-value (LTV) mortgages on the market (those with LTVs of 90% and 95%) is currently at 17-year highs.
These products account for almost a fifth of the entire home loans market.
Taylor Wimpey’s benefitting from this steady improvement in credit availability. But average selling prices on its new-builds declined 1.3% in the six months to June, reflecting more properties coming onto the market. This is another danger to the housebuilding industry.
Yet the Footsie firm’s revenues still rose 9% in the first half as completion numbers improved 11%.
I plan to hold my Taylor Wimpey shares for the long haul, given that Britain’s population boom is accelerating and the strain on current housing property is intensifying. The government believes 300,000 new homes are needed each year to meet this need. Indeed, just today (8 September), it announced a joint venture with FTSE 250 builder Vistry Group to help make this a reality.
With plans to loosen planning regulations progressing, companies like Taylor Wimpey could find themselves in a stronger position to capitalise on the UK’s chronic homes shortfall going forwards.
Another top FTSE stock
As Ashtead Group (LSE:AHT) sources most of its earnings from the US, it’s more regionally exposed than more global businesses. This risk is especially prevalent today, given the steady slew of poor economic data pouring out of the States.
I’m happy to accept these near-term risks, however, given the potential for strong returns once construction industry conditions recover. I’m especially excited by Ashtead’s earnings prospects as significant infrastructure projects come online.
The next decade will see heavy investment in digital infrastructure, transportation, and the energy transition. To give us a flavour of this huge market, Ashtead puts the industry development pipeline for 2026-28 at $1.3trn. That’s significantly higher than the $840bn recorded between 2023 and 2025.
The FTSE 100 firm has other growth drivers to exploit, like rising housing demand and commercial construction. But it’s not just in the construction market where it has substantial sales possibilities. The company’s diverse product mix also gives it ways to capitalise on the repair, maintenance and improvement (RMI), entertainment and emergency response sectors, for instance.
I’m also encouraged by the huge scope Ashtead has to grow profits through further expansion. Its market share has almost tripled since 2010, driving profits skywards. And the highly fragmented nature of the rentals market gives it substantial opportunities for more acquisitions.
