BUZZ-UK homebuilders: cash is king

** Housebuilders' shares at record highs not putting buysideoff as fund managers bet impressive cash returns in low-returnworld will keep gains coming

** While there are risks - inconclusive UK General Election,margin erosion & prospect of rate rises - high divis are realityagainst backdrop of robust house building demand

** Richard Watts, who runs Old Mutual Global Investors' UKMid Cap Fund, sees scope for cash returns "well, well above whatthe market expects"

** Galliford Try & Redrow divi hikesspurred big on-the-day gains

** Watts holds Barratt Developments ; says co usesbalance sheet more efficiently than many peers. Co runs c.4-yrlandbank & it does not pay for much land until gets planningpermission, meaning higher ROCE & cash returns

** Also holds Taylor Wimpey

** Notes choice between growth & cash back potential; e.g.Bellway, Bovis & Redrow build morehouses but then have to reinvest cash to drive volumes

** George Godber, manager of CF Miton UK Value OpportunitiesFund, holds Taylor Wimpey, Barratt & Bellway,trade on 12-mth fwd PE SmartEstimates of 9.7, 10.1 & 8.6 times,StarMine shows

** Earnings next wk: Bovis Mon, Persimmon Tues, &Barratt Weds (RM: tricia.wright1.thomsonreuters.com@reuters.net)