Member Info for steph

pound is up on yesterday's parliamentary news. Markets interpret the political chaos as making a "crash out" less likely and a soft or no brexit more likely.

Strange world where the government is massively defeated on flagship legislation and the pound goes up. Markets normally don't like chaos but they don't seem to like Teresa may much either.

I am so looking forward to her getting kicked out.

The Brexit chaos in parliament in the run up to March 29th would have had a much larger impact on investment in the UK if businesses, like us, had expected such chaos much earlier.

Now it will probably be resolved one way or another in a couple of weeks so it is too late to move or undo a recent investment. Like the rest of us they are all watching in horror but have an incentive not to do anything about it as we are in the eye of the storm now and the storm may pass shortly. Just wait and see.

https://www.theguardian.com/business/2018/aug/09/rents-in-uk-will-rise-for-next-five-years-experts-predict?CMP=Share_iOSApp_Other

UK housing market got very distorted compared to other comparable nations post war. One of the effects was a very low percentage of professionally managed rental properties for which we can now expect 20 years of catch up. So a big market.

For London the professional rental companies have so little choice right now. It is a seller's market and will be for a decade. There are almost no existing blocks of flats in single ownership to buy. The only supply is new build and that trickles onto the market at 20,000 units per year the majority of which will not be released to professional rental companies for marketing reasons. Maxed out maybe 10,000 units available per year available and then only if the professional rental companies are willing to pay near open market prices.

London could easily have 10% of supply as professionally managed blocks of flats without saturation benchmarked against other world cities. 10% of 3.4million units is 340,000. At a rate of 10,000 per annum (a massive rate and half of all new supply) it would take 34 years to get up to 10% of supply.

With such a shortage of supply they are not in a market position to demand much of a discount to UK builders over private sale. Berkeley and others are happy to limit volume to keep their high margin business model in London.

no idea. Great time to build up a long term holding. We really should not be able to buy at these levels.

I'll borrow, transfer and steal to put 20,000 into my ISA April 5 but still too scared of our politics to buy on my spread. Short term I just don't know the direction of our SP. Probably up but who really knows.

That will put me well over 50,000 TEF shares within my ISA firewall and I do hope that in 15 years time the divis on that will generate an income of 25,000+

Whatever happens on Brexit it will be sorted within 10 years.

https://www.theguardian.com/business/2019/mar/05/bmw-mini-cowley-no-deal-brexit-toyota

https://www.theguardian.com/business/nils-pratley-on-finance/2019/mar/05/brexit-wont-bother-the-city-but-everyone-else-should-worry

A tale of two nations.

London and TEF's patch will do OK with even a chaotic Brexit. Some business and financial services will even gain well paid jobs. As transactions get less efficient, but no so inefficient that they decamp to Frankfurt, London will gain -especially the financial lawyers who must love Brexit preparations. Juicy fees of 3,000 to 5,000/day each and every day for several years.

we desperately need some forward guidance beyond 2020 in the interim and final results this year. Of course can all be caveated on no chaotic Brexit and no major change of market conditions. Current market conditions are challenging compared to the recent past but there is still plenty of market at price points that make a decent profit. Just no windfall anymore and probably not for a couple of years. TEF never in it's forward estimates included windfall due to HP inflation anyway.

So long as TEF stays close to major transport improvements or in regenerating areas HP inflation should be better than London averages. SO even if London wide HP inflation eases by 2% per year for 5 years TEF's patch may be neutral.

I don't see HP drops more than that for the mid priced areas TEF operate in over the next few years.

I do see a sharp reversal of current sour market sentiment if we sort Bexit cleanly one way or anouther. There is pent up demand waiting on the sidelines for clarity. In this scenario a large landbank will prove a cash cow. The quickest route to clarity is probably a referendum won by remain but a national consensus on what type of Brexit would also help.

https://www.telfordhomes-ir.london/media/press-releases/2019/long-term-strategic-build-to-rent-partners-selected/long-term-strategic-build-to-rent-partners-selected/

Great news but why only 200 homes each mentioned. Surely a strategic partnership like this is for 1000 to 2000 over 5 years -each.

Yes it is vague as to whether these are profits delayed (not fundamentally bad) or profits that have disappeared (bad). A smallish builder will always have a slightly lumpy profit flow due to planning.

No doubt the update in April will clarify. I am looking for forward guidance for 2021, 2022 when supposedly these delayed profits will reappear on top of the profits we were to get anyway and we get a nice jump.

Of course even if they do reappear in 2021 2022 the implication is that growth will be a bit slower than it otherwise would have been as profits are not there to reinvest in land for 2 years.

The sliver lining is that as build to rent becomes over 50% of units the speed limit of TEF to grow changes to doubling every 4 years (no longer constrained by financing a land bank). They can make up for lost ground if they like. The key is "if they should so choose". Uncertainly with Brexit as a driver may impact that decision. I hope not but hard to guess. I'd like some new multi year forward guidance now so the new strategy is clear. Have not really had a deep dive into multi year strategy since the work that went behind the dilution a few years back.

SP has not moved for 5 years. Even my patience is wearing thin a bit but still happy in my ISA holding and will top up April 5th when allowed and probably next April as well.

As I've said before every time I buy a bit on the spread it drops.

Long run still happy in my ISA but I note the delay in dividend growth. Still the same company with the same 5 and 10 year prospects. It is delay of profit not cancellation.

I think the market likes the chaos May is in as it paves the way for some market friendly outcomes. Market never really liked her deal nor her threat of no deal as a negotiating tactic with both EU and our Parliament.

She would make a good medieval inquisition leader. "do you want to agree with me or do you want your limbs pulled apart?

https://www.thetimes.co.uk/article/persimmon-faces-loss-of-help-to-buy-house-contract-nlrq02q7h

World economy and China slowing so all commodities have more downside than upside on price, aluminum traiding at prices even the most efficient western producers can’t make money on except in China where there are hidden subsidies Buy commodities coming out of a recession when demand is rising sell going into another slowdown or recession, As discussed I think tef will weather a mild recession which is probably already priced in,? Of course no deal is such a shock that all bets are off but I think it still unlikely. What I’m hoping for is not kicking the can down the road, I prefer mays deal tested at referendum then either way we will have a roadmap,

The City may thrive despite Brexit, but the rest of us won’t https://www.theguardian.com/commentisfree/2019/feb/22/city-free-port-brexit-deal-bankers?CMP=Share_iOSApp_Other London and tef market will largely be ok but all the manufacturing and agricultural bits of the uk will be royally screwed with a no deal Brexit. Roughly the greater the leave vote the more the harm to the local economy that will occur. Divine retribution if one gives full responsibility to the voters but I feel they were lied to by charlitans who have played them for personal advantage. Step forward PM Boris and chancellor Andrea

big stable fund in existence for over 60 years, indeed worlds oldest, and 4th largest in world. Fairly conservative. Likes prime property.

over half a trillion US dollars strong. It is enough to buy every single property in all of east London from Tower hamlets out to the M25.

bought a tiny amount on my spread. Quite remarkable given the background noise. TEF on a company level must pedal hard to overcome the headwinds but they are inching forward in spite of the background on company specific performance.

https://telfordhomes-ir.us14.list-manage.com/track/click?u=2852960edab5c719e0478c42e&id=d8ebcb8395&e=9f70bf23c9

businesses that rely on delicate supply chains need stable tariff regimes with changes brought in slowly with years of notice. Even if Brexit ended tomorrow a great deal of damage has been done to the UK's reputation for sensitivity to business needs. TM went around 2 years ago giving meaningless assurances and now she is threating crashing out if we don't endorse her specific brand of Brexit.

Our farmers will be faced with tariffs of 50% even if we set ours at zero. Car parts and cars exports will face 10%. For the auto industry 10% is huge. It is tight margin industry. We will lose most of our auto exports and maybe most of our domestic oriented car manufacturing as did Australia when Australia signed a low tariff free trade deal with China. .

Business and financial services, ICT and cultural and creative industries (that incidentally are largely based in London and support TEF's market) can adapt much better than the manufacturing sectors to this disruption.

I really did not imagine the Tories would take us out of the single market. I did imagine us out of the customs union as without that we could not sign trade deals however meaningless compared to what we already had. It was a expensive badge of sovereignty.

I wish I shared Cov's optimism that even crashing out of nearly all our global trade agreements at the same time will be alright on the night. Fox has not managed to roll over even a small fraction of our trade agreements. Personally I think it is the height of irresponsibility that May has let us drift into this position at all.

Thanks for the analysis I am probably as qualified as anybody to read across politics to markets and I have no clue anymore. Defies logic. Can’t understand why we have climbed out of the 2.80 hole when the political background is so dire. Maybe it is simply that the worse it gets the higher the odds of a very soft or no Brexit. Market was never keen on mays blind Brexit with coming out of both customs and single market as the negotiating principals.

Strictly If all builders had equally capital intensive business models than price to book tells the tale of the land bank which is a reliable indicator of growth potential. What is a builder had a capital light business model in relative terms to the rest? That builder would have more potential to grow for the same price to book. I suppose in my crude way that is part of the reason for my overconcenyration in tef . I also like the east london geographic focus and the near prime locations appealing to the still growing knowledge workers. I think well paid ford factory workers in the midlands are about to get screwed with Brexit . London will adapt as it has a different type of economy.