Member Info for strictlybricks

"Per the Nationwide's updated spreadsheet, available online, average house prices have gone from £257,122 in March, to £260,441 in April, which is a 0.4% increase; and then on to £260,736 in May which, last time I checked, represents a further increase of 0.1% not a decrease of 0.1% as declared in the Nationwide's own monthly change percentage in that particular column in their own spreadsheet"

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I have to own that I hadn't noted that the Nationwide's numbers were "Seasonally Adjusted" and when the adjustment figure is taken into account their calculation their minus 0.1% figure is correct ~ so any schoolboy error is mine not theirs (though given my age it would perhaps more accurately be deemed to be a senior moment..?).

Mind you, whether or not the seasonal adjustment is a valid contrivance may be something to conjure with, and, in any case, in straight, unadjusted numbers the cold hard fact remains that house prices fell in seven successive months from August last year and have now since gone up for two successive months.

And there's no contrivance involved in the straight numbers, so I think that that's where I'll take my lead from ~ as I do with house builder balance sheets as opposed to so-called "adjusted" profits which we tend to see with certain companies in this sector ~ the usual suspects including Vistry, of course... :-)

Strictly

Strictly

"More bad news ...."

................................................

Not necessarily so if you check the actual numbers...

The Nationwide ~ from whence these figures came ~ seem to have have made a schoolboy/schoolgirl/schoolperson (can't be too careful these days...) error which the BBC, in all their forthright forensic fallibility, have clearly simply parroted without checking...

Per the Nationwide's updated spreadsheet, available online, average house prices have gone from £257,122 in March, to £260,441 in April, which is a 0.4% increase; and then on to £260,736 in May which, last time I checked, represents a further increase of 0.1% not a decrease of 0.1% as declared in the Nationwide's own monthly change percentage in that particular column in their own spreadsheet... :-)

Bl..dy hell, you'd think someone would have typo checked that seeing as these little price percentage movements tend to make for national news ~ given that so many of us seem to be transfixed by them..!

Anyway, for those of you who can be a.sed to check, here's a link to Nationwide's figures ~ well worth storing as a favourite in my view, I often refer to it....

For this particular situation, look at the UK Monthly Index....

https://www.nationwidehousepriceindex.co.uk/resources/f/uk-data-series

Strictly

Freedom,

Captain Hindsight's probably your best bet for that... :-)

Trouble is, I find that the old b.st.rd is never around when you need him...!

More seriously, though, I reckon that the rest of this year and beyond could go quite seriously in potentially different directions depending on a whole host of things, and one of the main reasons, if not THE main reason, that I'm holding about a third of my investments in Persimmon right now is their significantly better freeboard than the other housebuilders...

That might be a boating metaphor, so possibly a bit risky to using for a house builder, but I think it stands up....?

The point being that, on a boat, the more freeboard it has, the worse the conditions it can cope with ~ just look how high the front of a trawler's hull is, and then consider that those brave lads are out in all weathers....

Strictly

Ozzie,

There's net cash and then there's total liabilities as a percentage of tangible net balance sheet ~ which in my view is more useful for assessing the relative strength/weakness of a company against others in the sector....

Of the companies I follow, on that metric, Persimmon is a close third on the two leaders... Persimmon are on 49% against Taylor Wimps, best in show (surprisingly) on 44% and Bellway on 45%...

The nightmare of the sector..... Battersea..... aka Bovis.... aka (trying to escape their murky past with a name change, no doubt...) Vistry.... is on 139%...

This is even worse than Inland as at their last published accounts for June last year ~ they were on 111% at that point...

And look at the mess they're now in..! :-(

Strictly...

Quickdip,

Do allow that this was was written by Melissa Lawford ~ the Telegraph's resident in-house property doomster....

On occasion when I wake up in the morning and suspect that I might be feeling a bit too cheerful, I seek out one or two of her articles to read ~ and then all's right with the world once more.... :-)

Strictly

Crossley/Velo,

I had down in my spreadsheet for a trading update from Persimmon for 6th July and also for the half time whistle on 16th August...

However, following your comments here, I have just checked their financial calendar, and the July update is no longer mentioned but the h1 results date is now down for 10th August....

After that, there's another trading update due 7th November...

https://www.persimmonhomes.com/corporate/investors/financial-calendar/

Strictly

gwm,

Not sure if that is supposed to be poster or rooster, but I suggest having a read through the PSN full time whistle RNS posted 1st March, and then also the comments around that time and, if you're really up for it, also watch the PSN scribblers' love-in webcast of that time....

Then I reckon you'll have about as good a handle on it as anyone ~ as it's not really a straightforward matter....

But the 60p due Friday might be about it...?

Or it might not, and maybe a bit more to come..?

Strictly

Cantbelieveit,

I would say that's not just a question, but rather a whole shedload of questions....!

While more succinct contributors here may be able to give you a more useful answer in just a paragraph or two than me, I would recommend reading back through the copious comments here and also probably on the Bellway & Redow chats...

You could quite reasonably skim past most comments as being moment to moment market chat, and just concentrate on those that dig a bit deeper...

Assuming you're intending investing more than just a bob or two, I would humbly suggest that would probably be time well spent as, over the months & years, much has been covered...

Strictly

Box,

There is a profound difference between taking a view on short term market prices and taking a view on value....

It seems you have been doing something akin to the former, and for a very long time...?

I mean, on a continuum between day trading at one end and long term buy & hold at the other, you’ve implied that you're nearer to the former...?

You've mentioned you've been hammered twice, but not said whether overall you’ve lost or made money....?

If you are still in overall profit then, as it tends to go in day trading, it would seem you are an above average performer in your particular game as, statistically, most day traders lose money in the long run...

And by saying that you don’t have time to do this a third time, I’m inferring that, like me, you’re saying that you’re creaking on a bit rather than meaning you don’t have time during your day to pay attention…?

Anyway, I’ve been in this investing malarkey for twenty three years ~ and solely in house builder shares for the past twenty or so of those ~ and while I took a market kicking in the credit crunch, it wasn’t a value kicking and so, like John Cleese saying he had been turned into a newt by a witch back in the Monty Python day, it did get betterl…. with, in my case, full recovery and then onwards & upwards from there…

But steadily ~ it didn’t happen overnight…

So, the concept of winning the lottery in slow motion ~ I mean by buying best perceived value and then being prepared to be patient if it comes to it ~ might just be a notion worth considering…?

Whereas get rich quick plans tend to come with added risk & misfortune…?

Strictly

Johny,

I've just sent an email to the address you gave...

Strictly

Following up on my comment here just yesterday, as it so happens, there's a relevant front-page article in the Telegraph online this very morning ~ by Melissa Lawford, whom I imagine that anyone who is a regular reader of the Telegraph’s business & investing sections will recognise as the their resident daily doom-monger of the housing market... (I bet she gets invited to a lot of parties..?)

Much is what is written in the Telegraph these days tends to be hyped-up guff, and it seems to me to be morphing into the Daily Mail, so you do perhaps have to allow for that, I feel, and take from it what you will...?

But, anyway, here's a link, and also the first few lines of the article, copied & pasted below:

The article does also include a graph showing the trajectory I referenced in my previous comment, which is handy ~ I mean, that of declining buy-to-let availability since 2015…

And this in a nation whose population is increasing…

While our pal Michael Gove seems to be happy to wade in where others fear to tread, it seems to me that it will require a particularly brave (or perhaps read “foolish” for that..?) politician to tamper too much more with the rental sector and add further risk to what is already a very uncertain property market…..?

But what do I know…?

And, as I said in my previous comment, I’m fully invested in house builders so I’ll just have to take on the chin whatever is coming down the pike at us…?

Strictly

………………………….

https://www.telegraph.co.uk/business/2023/04/17/landlords-to-leave-buy-to-let-as-baby-boomers-retire/

"Half a million landlords to leave buy-to-let sector as baby boomers retire

Landlord exodus is expected to put more pressure on already-soaring rents
By Eir Nolsøe and Melissa Lawford 17 April 2023 • 6:00am

Nearly half a million landlords are expected to sell up in the next five years, as the baby boomer generation retires and cashes in their nest eggs."

Steve,

You may well be right...?

However, I would say that the more variables being included to be considered, the bigger the range of possible outcomes and the more speculative it all becomes....?

I wasn't really trying to take this any further than saying that (taking figures from the Nationwide data I referenced previously) inflation adjusted house prices fell from £197k in Q2 1989 to £123k in Q1 1996, i.e. a fall in real terms of 37% ~ a pretty blo.dy big fall ~ yet the builders were reasonably able to take it into their stride...

To address your point, though, given the recent trajectory of diminishing numbers of rental properties ~ in large part thanks to our pal Michael (Gove) ~ any rent controls that may or may not be introduced into that scenario would surely only be likely to accelerate that contraction of available rental properties…?

So, with a still fairly rapidly increasing net population due to immigration, while buyers may be holding off right now due to both uncertainty about house prices and significant uncertainty about mortgage rates in the short term, surely that customer stand-off in buying can’t last forever…?

And, coupled with that, lenders want customers, and surely that plus possible further government intervention at some point is likely to drive both mortgage costs down & demand up…?

As I said before, I don’t drink with Captain Hindsight, nor do I have a crystal ball, and also Mystic Meg is sadly no longer with us (wonder if she saw that coming?) so it comes down to likelihoods, track records and trajectories and so this requires us to take a view for ourselves as investors and then each of us putting our money where our mouth is ~ or not, as the case may be…?

For myself, I remain fully invested, and furthermore that’s all in house builder shares.

For better or for worse, I guess..?

Strictly

PS.

A senior moment on my part ~ the figures for Bellway were from 1990 to 1996....

Strictly

Karv,

For you, or for anyone else interested in this, (and it's certainly something I follow), perhaps click on the link below...?

https://www.nationwidehousepriceindex.co.uk/resources/f/uk-data-series

Providing the link works, then click on "UK house prices adjusted for inflation".

This will give you an Excel spreadsheet....

Scroll up the spreadsheet from the bottom a bit, and there's the graph that I'm confident will interest you....

It clearly shows, up to end of Q1 2023, how far inflation adjusted prices have fallen from their peak at Q3 2007 and also from their recent, lower, peak, at Q1 2022....

In my view, the graph is illuminating, and it brings a degree of reality check (and I generally like those) to all the hyperbole around house prices...

If you'd been watching this for years, as I have, one thing that has gradually shifted over time has been the trend line...

Back in the day, when I first saw this graph, the trend had been house price growth of 2.8% a year plus inflation.

Now, it's 2.4% ~ and that has fallen incrementally over the years...

In cash terms, house prices, thus far, are sliding somewhat more gently than in the credit crunch, 2007/8 ~ the movement is somewhat more akin to the gentle but ultimately more long lasting slump of the '90's...

If this is something like how it is to pan out this time there is possibly some comfort to be taken from that…?

Because through the decade it took to get back to par on house prices ~ from 1992 to 2002 ~ Persimmon still averaged 11.9% ROE and Bellway averaged 12.9% ROE.

This is someway below average in both cases ~ but surely hardly a disaster warranting the low PBVs we are currently witnessing…?

Of course, seeing as I’m not drinking buddies with Captain Hindsight, I couldn’t say how this will actually go from here…? :-)

Strictly

"One regret, I do so wish I’d entered your SWR although I can play along on the sidelines. Definitely next year! "

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Crossley,

Well, if you do want to join in on that, you may have not noticed the recent blog comments saying that, as it so happens, I’ve now rebased this year’s SWR competition as from the start of this month ~ as I came to the view that we should take out all the non-housebuilder stuff (largely brought in by "outsiders" joining the blog in recent years…) as I reckon it was proving to be a distraction and, like Beelzebub, could lead doubters off the Straight & Narrow...

I mean, that they might start to ponder risking their dosh in dodgy companies ~ which, IMO, is pretty much anything else other than house builder shares ~ though I appreciate that that comment may not go down well in all quarters here…?

So, anyway, you can go to the ball this year, Cinderella, if you so wish ~ just email me directly to confirm on this (especially as this is all rather off-topic for LSE BWY share chat ~ and so some folk might soon become naffed off by it…?) and also for me to send you the relevant spreadsheet...

As you know, you are also most welcome to comment on the blog for this sort of stuff rather than indirectly via here on LSE...

Strictly

Johny,

Well, I had a look back through some of your stuff here just to get a sense of things, and you seem to write reasonable comments, and in a friendly manner, and those things are important in my view to maintain the character of the SB blog which I like to think is informative & supportive and with the occasional bit of banter thrown in…

I originally set the blog up around seven years ago to help my circle of family & friends who have joined me in this investing-in-house-builder-shares malarkey over the past twenty years or so that I’ve been in this game ~ having seen how well it’s gone…

And over the past few years, I have invited in a few commenters from here and also from the Telegraph online share chat… and there’s a quid pro quo in that in that I look for the “outsiders” who join to be able to contribute to the discussion from time to time…

The thing is, the people who’ve joined from outside will have each had their own investing journey thus far, and no doubt different thoughts & opinions to match ~ rather than coming into this from having followed Brian (i.e. me ~ though that’s not actually my name…) who isn’t the Messiah just a very naughty boy…

And I did take a very brief butcher’s at Petrofac, seeing as you have written so many comments on LSE about it….

A quick look informed me that it is the sort of company that absolutely terrifies me & my crew as an investing prospect ~ but if you join the blog and read back through some of the past posts I’m sure you’ll soon understand why..!

Anyway, if you want to put up an email address here ~ albeit, if necessary, a temporary one just for the purpose of making initial contact ~ we can then take things from there…

Strictly

"Strictly- I read a while back now that you were basically 60% BWY and 40% PSN- is that still the case?"

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Johny,

I'm currently 2% cash, 35% Bellway, 32% Persimmon and 31% Redrow.

Three different shares ~ that's quite a big spread of holdings for me...! :-)

Strictly

Johny,

I've got one or two people like you on our private blog about house builder shares....

Senior moment spotters...

My senior moments, I mean, as I am prone to them…

So, well done for spotting that ~ my error was actually a typo, as it should have been £2,390m less £675m puff, gives £1,715m tangible assets, which divided by 228.3m shares does equal my figure given of 751.2p BVPS for 2021.

It was just a c.ckup copying the starting figure from my spreadsheet...

As an aside, though, I do have to say that I am seriously impressed with Greg Fitzgerald, the big cheese at Vistry….

He seems to have taken two inmates of Battersea Dogs’ Home ~ that is, Vistry & Galliford’s house building arm ~ mated them together, and then convinced the market that he’s come up with a Crufts winner as the progeny…!

Early on in our blog, I wrote a post entitled “Profit & loss accounts can be a work of fiction, so rely more upon balance sheets”, and that’s what this is all about, really….

I mean, Greg said, upon the blowing of the recent Vistry full time whistle, that their return on capital employed for 2022 was 28.6%.

Well, he might as well have said that he was hung like a stallion…

Because what both of those comments would have in common is that neither are demonstrated in the balance sheet…

Strictly

Crossley,

The SB blog is the place to go ~ I don't want to reinvent the wheel here.... :-)

As it happens, the "Persimmon" & "Persimmon Chapter 2" posts, from last November & January respectively, have the information you're asking for from me here....

Strictly

Mike,

If you're a regular reader of the Telegraph online ~ as I am ~ you'll no doubt already be aware that Melissa Lawford, the author of the piece you've provided a link for, seems to have been put on this earth to deliver our daily dose of property market doom & gloom....

While I appreciate that even stopped clocks are correct twice a day, I have read enough of her stuff not to put too much store by what she writes....

Strictly