Barratt Developments Share Discussion Threads

[1gw] 09/2/2015 15:48

I think this (retirees entering buy-to-let in a meaningful way) is a very real possibility. For those used to managing their own investments (SIPPs) it allows them to continue doing this - release funds from the SIPP, use part of those funds for a deposit on a buy-to-let and get a mortgage for the majority of the buy-to-let property. This (leveraging) potentially allows them to defer the point at which they need to release cash from their main property (i.e. downsize). Somewhat risky of course, but if longer-term fixes (i.e. 10 year) come to the buy-to-let market at close to the rates now being offered for main property mortgages then that would remove a significant chunk of the risk.

I'm sure I'm not the only one who has looked at the incredible 5-year and 10-year fixes now available in the "normal" mortgage market and thought that I wouldn't mind getting one of those to provide money for a rainy day / school fees / leveraging investments / new toys. Of course, if you explain it like that to the bank you find out those rates aren't available unless you're actually buying a property with the mortgage - which makes you think, maybe that would be worth investigating...

[cockneyrebel] 09/2/2015 13:48

Pensioner landlords could drive up house prices for first-time buyers
A wave of retirees entering the buy-to-let market will push home ownership dream further out of reach for young buyers

[taffee] 09/2/2015 06:39

But what if house prices join the deflation party?...which is likely if
You consider prices in Japan fell dramatically for 20 years + with near zero rates

[cockneyrebel] 08/2/2015 10:21

Interest rates: why they won't rise this year

Low inflation and possibility of falling prices to keep interest rates on hold in the near term, but Bank of England could warn that rates could rise sooner than market expectations of summer 2016

[cockneyrebel] 07/2/2015 15:09

I don't pay much attention to the FTSE 100 Easbourne - it's pretty irrelevant as it has such a bunch of diverse groups (Banks, Pharmas, Oil & Expo) that it doesn't give a true picture. But if Banks start doing well in a recovery and oil/miners rebound then I think it might make new highs soon.

I prefer the FTSE250:


free stock charts from uk.advfn.com


That looks like a head and shoulders reversal and a break out coming on the slightest rally here imo. If so then a lot of sectors are going to rally imo - Builders, Builder Suppy, Retail. Also the weaker £ is boosting $ earnings so the exporters are likely to beat forecasts - that should help the FTSE100 and 250 too imo.

All imo

CR

[1gw] 07/2/2015 14:59

Personally I think builders can maintain the run for quite a while longer, but it's likely to be a bit volatile and there are risks.

They are still priced IMO for the cycle turning, yet the managements themselves seem to be saying they believe we're in the fairly early stages of this (up-leg of the) cycle. A lot are now returning cash and margins are still improving as the lower-priced land continues to come through and they capture the recent price inflation. Several of the ones I've heard recently seem to have talked about the relative lack of competition for land. They have also been talking about the particularly favourable combination of mortgage availability (long-term fixes), low rates, employment growth and stamp duty changes.

Liberum itself (which apparently caused the bdev weakness on Friday) appears to be positive on the sector.
"However, Liberum Capital also believes that in a world of low growth, the housebuilders’ high returns are becoming ever more attractive, ‘especially as these are protected by major barriers to entry and new-found industry discipline’."

There is maybe a distinction to be drawn between those that have a clear path to top-line growth (Crest and Telford Homes spring to mind) and those which are more dependent on increasing margin. Share prices of both can still do well IMO but I think I prefer those which still have room to grow - provided the new government follows through with measures to support the expansion of home building.

And we haven't seen any real M&A in the sector yet have we?

Downside risk exists in the form of rates rising more quickly than expected, spillover from Greek or other crises, political instability, but IMO these risks are more than fairly priced in to current share prices.

All IMO, DYOR.

[eastbourne1982] 07/2/2015 14:43

Fair enough CR.

I see the whole sector as a good one to trade in the short term however I'd be inclined to short a lot more than long, I recently traded Barr Dev making a few percent in a day, I was intending to hold it for a few days / weeks however it moved so quickly I took my profit early. If it gets towards £4.72 again I'd consider another short term short depending on how the FTSE and wider market is doing, the whole market has had a good few weeks after a poor start to the year, this year will be very very up and down imho.

On a side not where do you see the FTSE100 trading in 2015 CR, I see it maintaining the trading range between 6200 and 7000ish, if that is the case we are toppy at the moment.

[cockneyrebel] 07/2/2015 14:33

Agree - I don't think builders are a good long term investment. I bought into BDEV around 60p and rode the first rally up to 250p or thee abouts. They carried on to £3.

I bought back in 2012 just before starting the link above when BDEV was around £1 and I've pretty much held since then other than a couple of trade outs as the price looked toppy at times.

The market is now cold on builders but since Jan I think builders and estate agents have done far better than expected, hence I think there's a fair bit in builders short to medium term. Rates won't rise for a year imo and when they do it will be very small and gradual imo.

All imo but I fancy builders over the next 6 months.

CR

[cockneyrebel] 07/2/2015 14:01

A PE of 8.5 here and a 5%+ yield - what's not to like?

When do you prefer to buy builders? When they pay 1% yields and are on PE's of 20 as they were 2 years ago when everyone was buying?

CR

[eastbourne1982] 07/2/2015 13:59

Serious question CR, do you genuinely think house builders are good value ?

[cockneyrebel] 07/2/2015 12:40

All the builder charts look positive to me:



Liberum's most disliked builder is Persimmon - wierd that that's the best recent performer making a new all time closing high on Thursday.

BDEV, TW, PSN have the strongest momentum in any builder rally imo.

CR

[1gw] 07/2/2015 12:18

A number of articles put Friday's fall down to a Liberum downgrade (from BUY to HOLD).

According to the FT one, Liberum view is: “We no longer see enough upside to our price target [of 498p per share]. To be more positive on the stock we need greater clarity on volume ambitions beyond 2016 and returns to rise more quickly.”

Doesn't sound too bad and gives management time to prepare a slide for the interims presentation on 25th Feb.

[moneybags] 06/2/2015 11:50

Results leaked today..................................................................................Maybe..............................................................................................................................................................................................................................................................Maybe

[cockneyrebel] 05/2/2015 13:41

A close over 471p will be a be a new closing high and break out.

Bellway update on Tues will be interesting imo.

CR

[1gw] 05/2/2015 11:32

Well all the builders' TUs and calls that I've seen/heard have talked about a good start to January. Let's hope that's backed up next week by Bellway (and perhaps Carney as well with the inflation report) and then maybe we'll see analysts start to believe that things are getting better again.

[tudes100] 05/2/2015 06:40

Still invested, happy to be patient. Outlook for UK construction in the next 12 months is solid imo.

[bigmike100] 04/2/2015 22:45

Excellent thumbs up for house builders in the IC "examination of the prospects for every UK sector in 2015."

[cockneyrebel] 04/2/2015 16:54

Testing the highs at the close - nice :-)

BWY t/s on Tuesday.

CR

[1gw] 04/2/2015 16:49

Anyone still invested here?? Nice intraday chart today.

[1gw] 30/1/2015 16:26

Nice day trading! Good call on the 4.72.

[eastbourne1982] 30/1/2015 16:02

Closed short at £4.57, may drop more however I'm happy with that in a few hours, I'm still short Taylor Wimpey from over £1.38 as well.

[taffee] 30/1/2015 14:58

'Some of the best conditions I have ever experienced' should flag up a warning
Sign to any seasoned investor as they signal peak conditions unlikely to last.

Near zero rates and help to buy are super amazing conditions which can change on
A dime....even with all props used the market in general is a bubble bursting.

Builders experienced the same amazing conditions in US..Ireland..Spain..Dubai
Before the inevitable crash

In the 90s builders were on p/e as low as 4...such is the danger of building in
A falling market as it trashes their business models

[1gw] 30/1/2015 14:12

Thanks for the reply. I don't know much about the charts, but I do like the fundamental story. Crest update on Tuesday suggested things have picked up again in January so looking forward to 25th Feb interims for Barratt's spin on that.

HL published a reasonably balanced view (link below) on the housebuilders this week I thought. The article points out that they look expensive on a price-to-book basis, cheap on a price/earnings basis and that prolonged "goldilocks" should be positive.

The Crest Nicholson analysis (see post 504 above) of "some of the best conditions I've ever experienced" (prospects for a more sustainable housing market, CEO talking) follows the TW and BDEV (see post 482) updates earlier in the month which also sounded positive about the future.

I have taken some profit in TW. recently though, having bought more on the dip earlier in the month.