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I'm not convinced by the city centre conversions... Its a sector i've been working in for the past 18mths having been with the Big 3 housebuilders for 20 years. Your have to be very careful with these developments as there are always unknown costs and there are also tax implications and costs that new builds don't have. The planning changes will make it easier and a little cheaper on the up front costs, but the same cost risk and tax costs, so will simple speed up the process rather than changing the industry; there simply isn't the margins there for the house builders and doesn't fit there business unit models.
With the onset of Covid our sales and marketing consultants have seen a 75% reduction in what they call "serious" interest, with a big swing to properties with exterior space, something HBs can offer... and whilst they may offer smaller gardens than older properties, some see that as more of a benefit.
I'm still sat on my hands with what I have with Tw. Before 2008 city centre flats construction were booming and Tw moved in big time. Well looks like the next boom will be converting town centre stores into apartments and I believe Tw will move in at some point. Buying land is for the future
I think it’s pretty obv that tw share price is undervalued atm , more ppl means more homes and we’re currently unable to satisfy demand , I’m in the trade and many sites actually worked through the covid lockdown the needs that high
I think unemployment, Brexit, our unbalanced economy, unskilled workforce and chronic underinvestment in public services is going to cause a big reduction in living standards, which has been happening for the last 10 years. Houses may go up nominally as the government prints their way out but relatively I think the house builders are a bad bet. I think the demographic that go for new builds are going to be the hardest hit.
In the job I work Brexit will have a very bad effect on losing skilled workers. These can't be replaced as there is already a shortage of these employees.
The US on the other hand I cannot see struggling, they can grow their way out. Building there actually will add economic value, unlike here. Their tech companies and advantage is insurmountable in the medium term.
Not a chance. By the time any gov body repurposes anything with countless ‘stakeholder engagement’ reports and other tripe TW will have built another 1,000 homes
Hi Bamps
Agree, not time yet to get into HB's. Sure tw will be alright long term, but not for me now.
Just had a look at jlp and agree looking good. I will start investing there.
Thanks and BoL
Hi Tom, Nige
The risk with TW at the moment is high even with sales improving at the moment, no one knows what's around the corner.
Metals market is still rising, to sale now and buy into a falling market doesn't seem to be the right thing to do, but everyone to their own way is ok.
Nige better to look at Jlp loads of growth, video out on Proactive today
ATB:))
Nige,
Main reason for selling of my mining stock is that i've almost doubled my money. I started selling out TW at the £1.70 mark and i think averaged out to about £1.90 a share... so my strategy is to start selling off CEY (not all in one go!) and buy back my TW share; even selling half my CEY stake and buying back in TW at £1.40 will give me 36% more shares in TW than i held in sept 19. Once i've got them, i'll look at other options, maybe increase my holdings in some other income shares or take a punt on something...
Hi TimBob
For the reasons I stated I think it's too early to get back into Builders, and why get out of Gold when the price is just beginning to move? It could fly. I will look up cey, had a look at some others, but for me nothing as impressive as ggp.
BoL
Dont Worry Nige I started moving from TW into Gold (via mining stocks - my stock of choice was Centamin (CEY)) and some other shares last Sept; also released about a third of my investments into cash in Dec. Mostly because of the uncertainty around Brexit. But with Covid appearing, it looks like i made the right call.
Seen some great gains on Gold front, but i'm not sure how much longer the Bulls will go on this; so now just deciding if i should start to sell them off...
Started buying back into TW at the £1.40 mark... and will continue to top them up with some of my monthly returns from divis that are still paying out.
Long term have no feat with TW, just don't see them hitting the £5 mark.
Ps
From Tony Fawcett, ggp Board 04:12 today:
"Analysts at Goldman Sachs, the Wall Street investment bank, last week lifted their 12-month forecast for the gold price to $2,300. “Real concerns around the longevity of the US dollar as a reserve currency have started to emerge,” the bank’s analysts told clients. “Gold is the currency of last resort, particularly in an environment like the current one, where governments are debasing their fiat currencies and pushing real interest rates to all-time lows.”"
Hi TimBob
The points you highlight, Cheap Money, Changing work practices (from home)... imply to me that an economic and cultural change is in process. Housing Slumps used to be caused by Govt increasing interest rates, but now we have had a Banking Crisis, Brexit (and Pos No Deal) and looming Recession, besides a possible Economic Meltdown.
How much money can you print until people realise it is worthless? This is why I am into Gold via ggp.
Don't know how much lower tw will go but expect a big drop, only good thing is that due to Supply / Demand situation I think they will perform better than most other shares (possibly causing a revaluation to Sage levels). You can cancel foreign holidays, go out for fewer posh meals, keep the old banger going another year or 2, but you need a Roof, so tw should survive a Recession better than most.
The above 4 horses of the apocalypse will move Sp's more than anything and detailing trends, raising cash, decreasing immigration... is pretty meaningless in comparison and incidentally, bkg one of the best run Companys in the Country. Quite sure they will survive but will need to adapt and in the process of doing that.
So, I suggest you get into Gold as a hedge against disaster. Price of gold already soaring.
BoL
Semi agree with Nige_W on this; supply is vastly under the demand levels. Yes UK has on average smaller households than some countries, mostly due to significantly less multi-generation households (which wont change quickly).
Money is Cheap, and will be as long as we are in a recession...
Home Working will affect demand, but if anything, it will increase demand for homes either people upscaling or buying their own property in a location they can actually afford.
Personally think its a good time to buy into HBs as the prices are depressed by very poor sentiment; though not a great buy if your after a divi anytime soon. Long term, i doubt TW or any housebuilder will be rated in the same way as Sage, so think the more recent historic highs of £2.37 gives us a guide of future share price...
Good discussion going on. One thing to bear in mind is that Sage has a Per 4 * > HB's, so if tw had Sage Per Sp would be 484, so all it needs is a small change in perception by the market and 500 not impossible.
Covid19, Brexit (or lack of) and Recession will have a huge affect on Sp's and Imho HB's better prepared for this than most other sectors cos Supply much less than Demand.
My hope is that as HB's outperform most other sectors in the impending doom, the Market will be forced into revaluing them, but that will take a long time.
Also I am mainly out of HB's now cos I think things will get worse before they improve.
Last point, without wanting to sound too gloomy, Money is cheap now - this doesn't mean it will remain cheap, nor guarantee it will still have value.
BoL