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Buys £500k worth
Oops, just read the news.
I believe they've already set aside ,£140m.
Big provision for cladding here £300m - might hit sp - hope not.
The latest on cladding is that Gove has made an anouncement on fuel poverty and suggested residents remove the cladding themselves and burn it on open fires to keep warm- what a genius!
https://www.sharecast.com/news/news-and-announcements/govt-said-to-have-dropped-demands-on-housebuilders-for-pound4bn-cladding-fund--9517546.html
Hope the link works... appears Gove might be back tracking....
House builders have all jumped, which presumably suggests something positive in the wind re cladding.
Has a deal been done? ??
Bellway has dropped £900bn since Gove and this latest liability appears to be sub £300m and I suspect that is subject to negotiation/clawback. We need a deal so that downside can be quantified and valuations based on the balance sheet and not group think sentiment
At some point the market will re rate the builders . I think the cladding fears are overdone here and hopefully the HBF will prevail over gangster gove.
I have just bought another £3k.
Bellway won't even guess how large the provision might be - the market is terrified. But even If Bellway is stuck paying 100m per year for ever, it will still have huge earnings.
Hi Taverham, BP is making a load of money, but it needs to be spent on replacing the oil business. In my view this is a massive barrier to growth. Bellway can spend its earnings on increasing the size of the land bank and the output of new houses - a much clearer path to growth and one that has worked well so far.
The reference to a significant cladding liability when timeframe extended to 30 years. My understanding is that was already in the share price but clearly spooked the markets.
After what I thought was an excellent set of results the SP falls almost through the floor. Am I missing something? GLA
Sp keeps falling so added another £2.5k - had to sell some BP , was that wise? time will tell.
Just bought in = great returns here over next few years imv. We shall see.
It will take more than a couple of quarter point rate increases to spark that kind of panic and even in the event rates jump to 5-6% property prices would likely fall owing to lack of mortgage affordability.
This is the peak of the market, we are witnessing properties selling for up to 60% more than the asking price but that is mostly due to lack of supply.
https://www.msn.com/en-gb/money/homeandproperty/the-1trillion-property-boom-that-s-how-much-the-value-of-britain-s-homes-has-increased-in-the-pandemic-and-prices-are-still-surging/ar-AATnr4u?ocid=msedgntp
Do you not think that the threat of i rises would mean even more demand now to get on the property ladder NOW and as such demand at this time alot higher than normal?!
The share prices of housebuilders Taylor Wimpey and Bellway have fallen heavily since the start of the year.
In fact, they are down by around 15% apiece year-to-date, compared to a 1% fall for the FTSE 100 and a 9% decline for the FTSE 250, as concerns surrounding the impact of prospective interest rate rises on the housing market have led to deteriorating investor sentiment.
While further share price falls cannot be ruled out in the short run, low valuations, sound financial positions and an upbeat long-term outlook for the housing market suggest recent declines for both stocks could present a buying opportunity.
Indeed, Taylor Wimpey and Bellway’s share price declines mean they now trade on relatively low valuations. For example, Taylor Wimpey trades on a forward price-earnings ratio of just 10. Bellway, meanwhile, has a prospective price-earnings ratio of only 7.5.
Those figures suggest that investors may have factored in a likely rise in interest rates during the course of the year as the Bank of England seeks to curb the highest rate of inflation for 30 years. As such, the potential impact of a higher rate of interest on demand for new homes, in terms of making them less affordable for buyers, may already have been taken into account by investors.
Moreover, housebuilders could face a relatively upbeat outlook over the long term. Even a rise in interest rates may be insufficient to significantly dampen demand for new homes. Around 30% of homeowner incomes are currently spent on mortgage repayments, on average, which is slightly below the long-term average.
This suggests that a modest rise in interest rates, which is forecast over the medium term, may not have an overwhelmingly negative impact on housing demand. In fact, it could even be argued that demand for new homes may increase as prospective buyers seek to act before likely interest rate rises come into effect.
Taylor Wimpey and Bellway’s fundamentals suggest that they have the financial means to overcome a period of uncertainty. Even if rising interest rates, as well as geopolitical and economic risks, cause a slowdown in demand for new homes, their net cash positions of £837m (Taylor Wimpey) and £330m (Bellway) show that they have sound financial positions to capitalise on any subsequent recovery.
Furthermore, the prospect of ongoing government support, such as via the mortgage guarantee scheme, as well as the potential for changes to banks’ lending criteria, could act as further catalysts for the housing market over the coming years.
As such, while further share price volatility cannot be ruled out in the short run, the recent fall in Taylor Wimpey and Bellway’s market valuations could provide a long-term buying opportunity. Their low valuations, sound finances and opportunities for growth within the housing sector suggest they offer good value for money relative to the wider FTSE 350.
thanks Strictly,
im in for a good few quid and not really looking to cash out for a year or two, finger's crossed for a decent return.
bigunz
Bigunz, if you can put aside any notion of trying to predict short term price movement and instead just pursue best perceived value then, in Bellway, you're looking at a company that has averaged around a 16% ROE for the past forty years yet which, despite the market at large being in the middle of a raging tech share price bubble right now, is currently available for pretty much book value.
What's not to like...?
It is currently, and by a substantial margin, my largest holding.
Strictly
any clever people out there got any predictions on where this price is going. imo i think this is a good buy in price but my history in s/dealing is awful so just looking for some sound advise please.
https://www.telegraph.co.uk/business/2022/01/07/leaseholders-spared-huge-cladding-bills-government-backdown/
Anyone think share price will drop quite a bit if this happens tomorrow?
A fund,with which former persimmon boss Jeff Fairburn has an association,has recently taken a short position in Bellway.
Good update from Redrow today, expecting revenue and profit next year to be above 2019 levels. Will likely mean Bellway update their forecasts in the near future.