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Somebody else talking some sense. Most of this board have no recollection of the early 1990’s or 2008 or choose to forget?
Mortgage products being pulled this morning, 2008 all over agin, have a look where this was between 08/2012 to see where share price is going. What a short. U.K. is totally ( brexit/Tories ) FXXked.
I am not moving from RDW to BDEV, I am thinking about building a position in BDEV to mirror my position in RDW.
My point was that there might be an over-reaction if the BoE decides to make an additional base rate increase, outside of the scheduled process.
Why are you moving it to BDEV when it still has further to fall. An additional interest rate bump - there are going to be several interest hikes. Do you enjoy losing money, if so, I should give it to charity so it can do some good.
Presumably the SP of BDEV (and other U.K. builders) will get a good (hopefully temporary) clobbering if we get an additional interest rate bump?
I have a position in RDW and have been thinking about moving to mirror it in BDEV for some sector diversification.
The BDEV does seem to have had more of a beating than most.
Manfor’s figures are a bit extreme but he talks a lot of sense. Certainly more sense than the moron who took on board my 3.50 prediction but was happy to pay £5 because they are a well run company. 3.50 will definitely come and these shares may even drop into the 2’s but this will obviously depend on the degree of slump in property prices over the next year to eighteen months.
You missed out Net Asset Value considerably greater than the share price and ex divi date very soon, sounds like good value to me at this price.
Two. good. director. buys. today. Stamp duty. cut. New. housing minister. . Mortgages. still affordable. Still demand. for. houses. Wages. rising. Inflation. will be . down next year Very. high. employment level (96.2%). High dividend. What's not. to like'
No response in the sp as yet to the SD cut.
Thought there might have been a gentle rise at least!
Ildivo - Like you I was looking at ETF's for this sector a couple of weeks ago.
As I couldn't;t find anything I liked & as a little test I opted to just buy £5K's worth each of 5 different house builders in an ISA. At the time & at the price I brought the average dividend for my £25K outlay was 8.8% which I am happy with & no broker fees either just the one off stamp duty.
I am a holder / keeper of shares so unless they rise exponentially I'll just keep taking the dividends.
Good luck on whatever you decide.
Should be announced this week and will hopefully boost the SP here, GLA
What are the best uk homebuilders ETF. Contains all the big boys - has a decent annual charge and reasonably liquid? Many thanks in advance
The idiot poster had for some stick posting the same rubbish on Persimmon board and no doubt elsewhere Top. Sad individual. There are laws against such stuff but the law has no teeth and the regulator is a waste of space. So just ignore him.
Strictly, I wouldn't bother responding to the anti-ramper that is manchild, he has a nasty hidden agenda.
You have to ask why is he posting the same clap trap all over the LSE house builders forums.
In a world of ever increasing shortages, he is proof that we'll never run out of numpties.
Manfor is also on the RDW board spouting the exact same garbage and that they will be dropping to £1. So it’s BDEV @ 80p & RDW @ £1, probably others as well. I could understand it if he posted valid reasons for his guesstimates but that’s just what they are, guesses from an asylum probably. Takes all sorts I suppose.
Manfor,
If you intend to wait until 80p, then IMHO, you will be waiting in vain.
Manfor,
Yes I only invest in house builder shares and yes I took a serious kicking due to the credit crunch of 2007/8 which meant I didn't recover my end-of-2006 value until January 2013.
That was partly self-inflicted as I'd had a large holding in Barratt back then for part of the downbound journey and, as I'd said below in the previous comment, it was hugely leveraged at the time....
An expensive lesson, painfully learned, and a mistake I hope never to repeat.
However, with the notable, probably one-off, exception of the covid iceberg, which I managed to largely swerve in cash & gilts, I have always remained fully invested throughout during more than twenty two years in this investing malarky.
And, furthermore, I anticipate remaining invested throughout from here-on as, sadly, I'm not drinking buddies with Captain Hindsight and I don't ever expect to be able to see the bad boys coming down the pike at me until they've hit me!
So, I necessarily have to go forward in the trust & confidence that, although this sector has always been a seriously bumpy ride in terms of market sentiment & prices, the underlying progress of the companies concerned abides (a bit like "The Dude" perhaps?).
And, up to the last calendar year end, i.e. 2021, I've averaged a 20% year gain over the twenty two years.
I appreciate that others here may seek faster progress than that, but I'm more than happy with that level of average gain and I consider that it's been like winning the lottery in slow motion.
So, right now, I am fully invested ~ that's currently 100% in Bellway, but Redrow is up close to them in terms of perceived value and these days are the favoured company to trade between with Bellway ~ and I anticipate remaining so.
Which means that anyone who is interested can watch my progress, for good or for bad, and maybe say "I told you so" in due course..?
I accept that.
Strictly
strictlybricks,
I hear what you are saying but it sounds a little bit like one of those “it’s different this time” arguments for always being bullish on the stock market or on a particular share.
The main problem, apart from the UK housing cycle now turning down, is the S&P is vastly overvalued according to almost every metric, and when the S&P bubble bursts it is going to bring everything down with it including all of the FTSE 100 and 250 companies.
And when all of the stock markets have lost another 50%, UK interest rates are at about 5%, the credit and derivatives markets are exploding, etc etc etc, where do you think housebuilders shares will be? All of the figures that you are quoting now for strong balance sheets will simply be blown away.
But you may be right of course. This time when the housing cycle reaches the bottom it may be different.
So what do you think are the best value housebuilders at present, and what is your expected low price for them in the next five years?
And you say you only invest in housebuilders? So how did your housebuilder shares perform in 2008? Did your portfolio value not collapse?
Manfor,
In the interests of maintaining share chat harmony ~ generally a good thing to do, in my view ~ maybe there's some gap that could be bridged here..?
For the record, I am a clear rear view mirror investor rather than trying to peer out of a foggy windscreen ~ I mean, I tend to trust the past to guide me for the future rather than rely on the crystal balls of the scribblers in the city....
Barratt in 2008 were very different to Barratt now.
Back then, they had an inexperienced and recently installed MD from another sector (Centrica) who thought it was cool to wade in and employ huge leverage to buy Wilson Bowden in 2006.
This was akin to opening a kayak hire shop just above Niagara...
It also took a great house builder off the market and therefore out of the game for us investors.
The upshot was that, with huge borrowings, Barratt were in an existential crisis come the credit crunch shortly afterwards.
They showed a small negative return on equity in 2007 of minus 6.4%, were then clearly in denial in 2008 with a nominally positive ROE of 0.9%, but then came the storm of land bank write downs and a serious rights issue which landed them with negative returns on equity of 51.4% in 2009, 10.7% in 2010 & 23.6% in 2011.
The upshot is that they still haven't fully recovered from this, and also still have a shedload of goodwill on their balance sheet as a hangover from the WB purchase.
Whereas now, clearly much chastened, they're currently sitting on a stronger balance sheet than Vistry, Crest and Redrow, with liabilities of 56%.
So a fairer comparison now for Barratt, IMO, would be Bellway through the credit crunch as they have never been entranced by big borrowings or takeovers.
They made a small loss in each of 2008 & 9, giving negative returns on equity of 0.9% & 2.5% respectively, and also they never stopped paying a dividend.
And while BDEV's PBV went to absolute ratsh.t, Bellway's PBV also fell to below 0.5 in 2008 at the bottom.
So, Bellway's PBV is currently 0.7, so still possibly a way to fall if it gets worse, and Barratt's PBV is just under 1.0 so, as you've flagged, a helluva way to fall to get down to credit crunch levels.
But, as described above, there is a huge contrast between now and then in respect of Barratt's balance sheet strength…
And the other thing is that none of the housebuilders are talking down their prospects ~well, apart from Inland, but then they hardly count ~ so while I have no opinion on where prices may, or may not, go from here, in the world of likelihoods it seems to be a brave thought to me to assume that they will fall as far as you suggest...?
Strictly
I remember what happened in the 2008 crash and so I know what can happen when the housing cycle turns. The top of the housing cycle has clearly been reached now.
I think that housebuilders profits will collapse over the next five years, and any dividends will be greatly reduced or stopped completely. When the UK housing cycle has reached the bottom in about five years, I would be quite interested in buying housebuilders.
My entry price target for Barratt is 80p.
Most companies if the case will be impacted by the current climate. However Manfor in your doom and gloom assessment what you need to factor is that barratts have been through this before and survived and done so very satisfactorily. They have also learnt to be organic with their business strategy.
Manfor, why are. you. so pessimistic - probably. affected by all the. doom and. gloom in the. press. if. you. have lived . as long as I have you. would probably know that all these "down" periods recover. quickly. There is NO recession, wages are. rising, there is a great demand for housing. and inflation will be. down next year. . probably to 4 or 5 percent. and mortgages will be more. affordable. If. the house builders meet their targets and. from my experience. they. do not set targets. they. do not believe in, the dividends will be at least maintained. In the case of. BDEV. they are lowering their. dividend. cover which will help. Chin. up - the new prime minister. has. got . right, she is reducing taxes and freezing utility bills. All will be well - have. confidence, I. have. Good luck!
The high dividends on the housebuilders will not last for long.
When the housing cycle starts to fall next year, housebuilder profits will fall and dividends will be greatly reduced or even stopped.
Directors adding and a nice 4% bounce in SP today :-)
In the last crash developers were stuck with large number of stock plots as the supply credit was taken away, we’re in different situation now and already seeing programmes be slowed to match the sales