Barratt Developments Share Discussion Threads

[buywell3] 26/4/2022 22:50

V other FTSE100 stocks this confirms a deteriorating picture of UK Housebuilders in the face of rampant inflation now forecast for the rest of 2022 and now forecast to last for years

[rwlly1] 21/4/2022 18:58

The government has helped to create the cost of living crisis by not allowing property prices to correct, like they should do in a free market. This would have left consumers with far more disposable income to spend on the rest of the monthly outgoings. You do realise you have also got an exploding population to feed and produce energy for.

[creditcrunchies] 21/4/2022 12:57

Look at the projections on just how many new builds are required in the next 20 years just to keep pace with population growth in the UK. They need to build 340,000 houses a year due to the exploding population. As I said dream on buddy as long as there are foreign buyers a weaker pound the only way is up long term. Only the minority will be distressed sellers a small window to get a bargain at 20% discount at best. You'd need a major government policy change like Japan or NZ to see a collapse.

[rwlly1] 14/4/2022 17:04

CreditCrunchies you aint seen nothing yet.

[creditcrunchies] 14/4/2022 13:02

30,000 distressed owners which may get repossessed Vs 25 million houses in the UK gives you 0.12% of all home owners. It won't crash down to that you'll get similar to the time in the financial crash which was 12 months of listed houses for sale at a 20% discount. If you don't need to sell you won't you'll wait, if you need to move due to a job you'll rent it out. The only way it'll crash is if the government changes policy on housing eg. Ban foreign ownership that'll crash it

[sikhthetech] 13/4/2022 14:25

Affordability is a major problem and is going to get worse.

House prices would only rise if people could afford to continue buying...

When the housing market crashes, no HB is immune from the crash. Likewise, listed HBs are not immune from stockmarket falls or movements.

Govn support, provided during pandemic, has ended. Repossessions which were stopped during pandemic are legal again.
Around 30k homeowners in severe mortgage debt.
Inflationary pressure, interest rate rises, NI rises, Council tax rises, energy price rises all impact affordability.


What do you think will happen once courts catch up with all those evictions which were halted during the pandemic??? What will happen to the number of homeowners in severe mortgage debt..

[essentialinvestor] 13/4/2022 14:05

rogue, yes agree - however UK housing affordability is already stretched.

[roguetraderuk] 13/4/2022 13:56

EI, during times of higher inflation house prices tend to rise too. they are hard assets so expected to provide a hedge and historically have done. so if theres some control on costs (i think the builders have said 5-6% this year) then thats not a problem. and house prices are up 10.9% y/y as per todays data. so thats not a real problem. the problem can come on the other side if prices begin to fall and they cant actually shift the houses. but for now a risk of falling house prices with high inflation is pretty small. the other thing to consider is cash balances and valuations. cash levels are strong and for valuations, id say you are 10 maybe 20% off pricing in more than a technical recession, which i believe most are prices in right now at todays share price levels. its worth comparing mkt cap today to covid levels but inclusive of any new issues or cancellations. also there are some interesting gaps coming up on some off them and historical they have been good levels to buy. those gaps could be catalysts as right now there isnt one. cheap can stay cheap thats why i dont like analyst notes based purely on valuations. but i think the gaps can provide some.

[essentialinvestor] 13/4/2022 13:42

rogue, sector issue besides property affordability is margins.

Those large input price increases more challenging to pass on in higher selling
prices as the economy slows sharply.

May be what the market is focusing on.

[roguetraderuk] 13/4/2022 13:37

2008 isnt unlikely to happen since both banks and hbs are cashed up by in large. also bank then they waited and once they finally acted in was with a pea shooter. what they learned from covid is you go early and you go big. so while 2008 prices would be nice i doubt we shall be seeing them. there is still far too much cash in the system. remember the little guy doesnt count. if the big guys are ok, then the system is ok. and the big guys are ok. bdev has a gap to fill at 498 and at 458 and those are likely to be filled. covid low mkt cap was around 3.5bn (presently around 5bn). that was pre vaccine and at that point nobody was expected to do a great deal of anything. any approach to that represents good value.

[porsche1945] 13/4/2022 13:28

On its way down the shxtta, 2007/8 all over again….banks getting dumped too, its all the same crxp, people load up for the divi then lose half their capital. Buy growth stocks. Fat Boris and little tax dodging Sunak sending the U.K. down the U bend, recession will be fierce, U.K. never really recovered from 08 thanks to Osborne’ stupid austerity, then the slow death brexit fiasco, covid, Putin, parabolic tax fuel prices and inflation, rates dont need to rise, the economy is fxxked now either way. Pity there isnt a decent opposition party cos cant survive the tories much longer.

[rwlly1] 07/4/2022 18:22

What has happened in the past is not necessarily going to happen in the future. One of the main reasons that property has performed the way it has is because governments know it is the easiest way to get growth in the economy. Far easier than getting meaningfull growth like producing more goods. Japan has got even less capacity than the UK to build so you can not use that argument.

[creditcrunchies] 07/4/2022 11:20

If that is what you believe just rent for the next 20 years then come back to me. Once you are on the ladder and you've reduced your LTV you'll weather any dips that hit the long term average price line. Property only goes down to release stock that are distressed. The population growth of the UK from 68 million to 80 million in 25 years means more homes than the targets set to local authorities as it is. Comparing US market with UK is like apples and pears they've got massive capacity to build we don't

[rwlly1] 06/4/2022 17:41

The main reason why property is where is. is the amount of funny money that has been pumped into the markets for as long as most people can remember. If you dont think property can fall just google japanese property from 1989 and you will see what can happen when you create a bubble.

[creditcrunchies] 06/4/2022 13:42

People have been saying property will fall or I'll wait until it drops a bit for the past 50 years. You get dips for sure in recession that's when you get the owners with 90% LTV who cannot repay and in negative equity. It's a tiny fraction of the market. Anybody else waits for years and years so what you get is flat lining nobody wants to sell against millions that need a house. That's just the way it goes.

[rwlly1] 05/4/2022 14:57

I am a dairy farmer, farm gate prices have hardy moved in the last 30 years for all agricultural commodities, whereas property has gone up four fold. If you assume that spending capacity in housholds stayes the same, the cost off putting a roof over your head has got to fall to make way for food and energy to catch up.

[medieval blacksmith] 05/4/2022 12:32

It all depends what the assets are, when and how they are valued. If anyone is interested in that stuff read about Carillion and its continual maintaining of its solar panel subsidiary value even though its revenues were converging towards zero and was subject to regular tests for impairment.

[rwlly1] 05/4/2022 12:23

Just because shares are trading bellow asset value on the books, douse not neccesarely make them good value. It is possible that these so called assets are massivly overvalued.

[porsche1945] 05/4/2022 12:03

@cwa, glad to see this pos tanking again haha. Will be back at a quid in the next two years you cheeky web toed cxnt.

[salver2] 04/4/2022 15:21

I tend to agree these housebuilders shares across the board are at generational lows -some like Redrow or Crest Nicholson are trading at 20 to 30 percent lower than their assets!

[creditcrunchies] 02/4/2022 00:24

look at what outperformed everything else with rampant inflation in the 1970s and 80s - gold, oil/gas, real estate. I'd say it's time to be contrarian. These house builders have got huge demand, large cash piles, low debt. You put a house on the market today you will get an offer on the first weekend of viewing. The reality is the demand is outstripping supply by a massive margin. It's the same with rentals the demand is huge there just aren't enough properties being built in the UK to meet demand. The amount of people saying property crash they're in a dream world most property is fully owned and paid up, a large chunk are on LTV of 60%, it's a much smaller amount on LTV of 90% they're the ones that crash. Also, look how strict the mortgage process is the lenders are very cautious they're not lending to sub-prime. I know my folks property in the 70s was £7900 it's now over £1 million when I checked the register. When they sold it in the early 80s it went for £200K that's what high inflation does folks.

[buywell3] 01/4/2022 08:00

Relentless downward pressure

Fight it at your peril

Rates are set to rise yet further due to gaseous effluence