5 top UK shares to buy

A stack of ASOS delivery bags

As the UK economy starts to recover from the pandemic, I’ve been looking for UK shares to buy for my portfolio that might benefit from the recovery. 

There are a couple of sectors I want to focus on. For a start, I think the outlook for the homebuilding sector is incredibly encouraging. 

UK shares to buy today

Low interest rates coupled with a lack of supply are two factors that have been driving home prices higher for the past decade. The government is trying to stimulate building with planning reforms, which may increase supply, but this will take some time to come through. 

In the meantime, I think these reforms and higher home prices will benefit builders such as Taylor Wimpey and Barratt Developments

Both of these firms have reported strong earnings recently. In a trading statement issued at the end of April, Taylor noted its order book was worth £2.8bn compared to £2.7bn in the prior period a year ago. The company also said it’s looking to push profits back into new dwellings for sale.

Meanwhile, Barratt noted at the beginning of July that forward home sales across its businesses have more than recovered from the pandemic. 

This growth potential is the primary reason why I’d buy both UK shares for my portfolio today. Key risks the firms may face as we advance include an interest rate rise, making housing less affordable. Increasing supply may also push down property prices. 

Another sector I want to have exposure to is e-commerce. Two fashion-based companies I believe are exceptional operators in this sector are Asos and Next

Online sales

Asos operates an online-only business model, while Next owns brick-and-mortar stores as well as a booming online business. Last year, Asos’s sales expanded 24%, and its active customer base increased to 24.9m. With users all around the world, I think the company is one of the best online retailers to own. 

Next’s sales lagged last year as many of the firm’s brick-and-mortar stores closed. However, the company is investing hundreds of millions of its online operation and this division now counts for more than 50% of sales. As the group continues to invest, I think it has tremendous potential. That’s why I’d buy it for my portfolio UK shares. 

However, the retail sector is incredibly competitive. So while both of these companies might be beating the market today, there’s no guarantee they’ll continue to do so. That’s probably the biggest risk and challenge they face right now. 

Finally, I’d buy public transport operator National Express for my portfolio of UK shares. Public transport use has plunged over the past 16 months. But I believe if the government is going to meet its green commitments, it’ll have to encourage public transport use over the next few years.

With that in mind, I’d use the current decline in the National Express share price to buy up this leading operator at a discounted price. That said, another coronavirus wave could devastate the business, and hold back its recovery.

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Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Next. The Motley Fool UK has recommended ASOS. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.