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Have £1,000 to invest in the FTSE 100? Here are 2 cheap shares I’d buy in an ISA today

It may be somewhat surprising that a relatively large number of FTSE 100 shares offer wide margins of safety at present. After all, the index has experienced a decade-long bull market that’s seen it reach a new record high.

However, recent uncertainty regarding the outlook for a variety of sectors means a number of FTSE 100 shares appear to offer good value for money. Here are two prime examples that could be worth buying in an ISA today, and holding for the long run.

Barratt

The recent updates from housebuilder Barratt (LSE: BDEV) have shown demand for new homes has continued to be very robust despite weak consumer confidence and an uncertain economic outlook.

Of course, the industry is being helped by government policies, such as stamp duty relief and Help to Buy, which are making the property market more affordable for first-time buyers. The result is that Barratt has been able to grow its bottom line at a fast pace over recent years, rising at an annualised rate of almost 19% over the last five years.

The stock market appears to doubt that a similar rate of growth is achievable over the next five years, since Barratt’s shares trade on a price-to-earnings (P/E) ratio of around 9. This suggests that investors are still unsure about the company’s prospects ahead of a period of political change.

This could present a buying opportunity for long-term investors. Certainly, there are likely to be risks ahead for the company and the wider sector. But such a low valuation indicates that the risks facing the business have been more than adequately priced in.

Landsec

Another FTSE 100 stock that appears to offer good value for money at the present time is real estate investment trust (REIT) Landsec (LSE: LAND). The company currently trades on a price-to-book (P/B) ratio of just 0.6. This suggests that investors are expecting a challenging period for the business, which could certainly present a buying opportunity for long-term investors.

Of course, commercial property prices could come under pressure in the near term. Business confidence is low at the present time, while consumer confidence is weak, despite improvements to wage growth over recent months. This could mean that demand for commercial property is low, which may translate into limited scope for rental growth over the medium term.

However, with Landsec having a dividend yield of 5.6%, it does appear to offer impressive total return prospects over the long run. Furthermore, with property having historically been a cyclical market that experiences periods of ‘booms’ and ‘busts’, investors may be able to benefit from low valuations and improving performance over the coming years. As such, while a potentially risky stock, Landsec could offer relatively high returns over the long term.

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Peter Stephens owns shares of Barratt Developments and Landsec. The Motley Fool UK has recommended Landsec. 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.