Taylor Wimpey Share Discussion Threads

[optomistic] 21/4/2022 17:51

Beckers, thanks for the guidance re Sikh. I will filter if necessary.

[beckers2008] 21/4/2022 17:11

Opt,
He wouldn't know the difference between a hawk and a trowel!
By what he spouts, he's never been onsite and clueless about the UK property market.
Best not to engage!
IMO, regarding the SP, we are finally at the bottom of the market. BWTFDIK ;)

[jugears] 21/4/2022 17:02

The only thing reflecting in the share price is how undervalued it is,I was going to take the dividends in cash this year but at this price its better value to take shares as they will be worth far more later in the year.

[optomistic] 21/4/2022 16:19

Sikh...try doing a few days laying bricks in the cold snowy weather...it slows the rate down a touch...

[sikhthetech] 21/4/2022 14:58

How does the weather make it excellent for building??? lol

If HBs were dependent on weather then UK/Irish HBs would suffer majority days of the year!!!
;-)

[optomistic] 21/4/2022 09:46

All this good weather, excellent for building and it appears it's reflecting in the share price of the builders this morning, could well be the start of an upward move for the sector :-)

[bondholder] 20/4/2022 09:08

With raised EPC requirements for mortgage lenders/higher energy costs new build is going to be increasingly in demand

[gaygay3] 19/4/2022 09:46

I think no special this year but they may increase the ordinary div

[dave.harker] 18/4/2022 20:55

Does anyone think a special div may be paid in 2022?

[beckers2008] 15/4/2022 16:23

From the FT.
House prices to fall? Definitely, but not quite yet.

While values are high, real interest rates are negative, making homes surprisingly affordable.

Average house prices were up 10.9 per cent in the year to February.
Nothing says out of touch to the UK electorate more than their leaders having too many houses — and in particular too many expensive houses.

No one was madly impressed when Tony Blair spent £3.65mn on a Georgian townhouse in London when he was still in office. Peter Mandelson was forced to resign over a home loans scandal in 1998 (it might not have not have been such a big deal had it not been an expensive Notting Hill flat). 

Then there is Rishi Sunak: his houses probably aren’t top of his worry list this week, but having four houses worth £15mn and being in middle of spending £250,000 upgrading one is not a great look.


It all makes perfect sense as shorthand for out-of-touchness: the price of houses in the UK makes having a property portfolio very much an elite activity. Look at the latest numbers. Average house prices are up 10.9 per cent in the past year to February — to £276,755, according to ONS official data. New-build prices rose 19.3 per cent, detached 14.4 per cent and flats 8.1 per cent (everyone still wants a garden).

Even in the worst-performing region (London!) prices rose 8 per cent. The Halifax numbers out last week showed a similar move in March — with prices up 11 per cent and some 18.2 per cent since the beginning of 2020. This is obviously nuts — average pay is up only 9.9 per cent over the same time period.

The house price-to-earnings ratio on Halifax numbers is now 8.4 times — higher, as Capital Economics, points out than the peak just before the 2008 global financial crisis, when it stood at eight.

These numbers come in the same week as we learned that inflation in the UK is running at 7 per cent and likely to stay above that for some time: it is, say ING bank analysts, “unlikely to fall below 7 per cent this year”. 

That means interest rates — and mortgage rates — are on the way up. The average quoted rate for a new two-year fixed mortgage with a 75 per cent loan to value ratio jumped to 2.12 per cent in March, says analyst Pantheon Macroeconomics. That’s the highest since late 2014 and up from 1.76 per cent in February.

It is also forecast to hit 2.7 per cent by the end of the year — at the same time as real household disposable incomes are set to fall by 2.5 per cent this year.

At the same time, says Hargreaves Lansdown, lenders are “increasing the assumed [household] costs in their affordability calculations”. That’s going to make it harder to get mortgages.

Are there signs that demand is not as hot as it was? Google Trends data offers a clue: search data for the big property websites is only 5 per cent above 2017-19 averages, having been 15 per cent higher in the pandemic months. There are also, say Pantheon, “tentative signs” of a rise in supply. The average agent has 38 homes on their books (against a long-term average of 55) but the latest Royal Institution of Chartered Surveyors’ survey data suggests a sharp rise in new instructions. Overall it seems obvious that this house price boom must end — and soon.

Or not. Interest rates are still almost ridiculously low by historical standards. The last time inflation was this high, the base rate was 10 per cent. Today, if you have a deposit of 40 per cent or more you can get a 10-year fixed-rate from Halifax at 2.48 per cent. Have 25 per cent and the rate goes to 2.58 per cent.

Long-term borrowing at 5.5 percentage points below the rate of inflation? That is as close to free money as you are going to see this year. At these levels the cost of servicing a mortgage is more manageable than it has been in most other periods. In the northern regions of the UK, notes Capital Economics, a consultancy, the cost of servicing an 80 per cent mortgage on the average house remains below its long-term average and even in London (where house prices are about 50 per cent overvalued in house price-to-earnings terms compared to the long-term average. Prices only look about 7 per cent too high if you consider them in terms of monthly payment affordability alone, again relative to the long-term average.

The Bank of England’s bank rate would, says Capital, have to hit 3 per cent for affordability to deteriorate to the same levels in London and the south-east as before the 2008 financial crisis and, even at 3 per cent, the rate would still be very negative in real terms.

It is also worth remembering that most mortgages (just over 80 per cent) are on fixed rates and those remortgaging this year will be doing so with lower loan-to-value ratios — due to rising house prices — and so may well see their rates rise very little, if at all.

Even if they do, any rise could be offset via the very tight jobs market — and rising wages. Note that average pay growth in the private sector was 6.2 per cent between December 2021 and February 2022 — and that overall growth in total pay kept pace with inflation.

Workers are more aware of inflation now than they were even a few months ago — and prepared to ask for pay rises to match it: it is not a given that real earnings will fall. The upshot? Even if buyer numbers fall off, there will not be the sudden rush to sell you might expect if rate rises were to push mortgage holders over the financial edge

Finally, it is worth casting your mind back to the early 1970s. Much was different then — mortgage lending was just opening up to dual income for example and house prices did not start the decade expensive. But nonetheless, prices went bananas. Land Registry data tells us they more than doubled from the start of the decade to the end of 1975 (from £3,950 to £10,000) and doubled again by 1980 (£19,273). 

Over a horribly volatile decade, money invested in property just about held its value — while that invested in the stock market did not. Those nervous of losing their cash to inflation may well have noted this: there is a record £1.9tn on deposit in the UK at a time in which deposit rates are at a record low. Keep your money in cash and with UK CPI at 7 per cent you are guaranteed to see the purchasing power of that cash fall by over 6 per cent every year.

Put it into property and you might think you won’t. None of this suggests the boom can keep going indefinitely. It can’t. At some point reality will catch up with prices. But it does suggest that there might be a year or two left in it. This won’t make the value of Sunak’s houses less irritating for voters. However, there could be a positive in it for Boris Johnson: he appears to have a cottage in Oxfordshire and a flat in Camberwell. But no mansions.

Merryn Somerset Webb is editor-in-chief of MoneyWeek. The views expressed are personal; [e-mail];

[growthpotential] 15/4/2022 16:16

The entitled generation:https://thismon.ee/a/10715231

[beckers2008] 15/4/2022 00:18

BuyBadly,

Why are you not on the AZN BB?
Your short gone BuyShortBadly?

I know your only trying to help us poor longs as you purport to be our saviour!
But your really spout BS.

Bye Bye Buybadly.

[buywell3] 14/4/2022 23:54

The charts and TA are looking dire

Buybacks at less than NAV/share are imo not a good idea

[optomistic] 14/4/2022 16:39

Good to see the builders making making some headway today :-)

[disneydonald] 14/4/2022 16:02

@Dexy. Generally I agree with your comments. However, if you look at the accounts you will find that EPS is not part of the management incentive plan, with operating profit, operating profit margin and cashflow the main financial metrics. The remaining 40% for ESG, customer service etc.

Another way to look at the buyback is that they recently issued shares at ~ £1.45, and now they are buying those back at ~£1.32. Not all of those who swallowed the managements sell at the time will be pleased to see shareholder value diminished, however small. Of course that was pre Gove's game of popular politics.

Plus point, again smallish, is a saving re dividend payouts. With current dividend rate of 0.044 that should work out at around £4.9m on the £150m buyback assuming average paid of ~1.35. Although, the 25m held in treasury and not cancelled will find their way back into the market as management incentives and share save plans vest. If set against the residential property tax which will cost Wimps per year (£20m - £5m) making £15m. Either way small potatoes.

Not heard from Elliott for a few months, wonder if they will now pipe up given most of the controversy over cladding has been put to bed. AGM in a couple of weeks, that might trigger some activity.

[ftir1] 13/4/2022 14:28

What happens when their NAV collapses after the housing market implodes?

[dexdringle] 13/4/2022 14:10

ftir113 Apr '22 - 14:01 - 6327 of 6327

Just imagine where the TW share price would be if the moronic management weren't buying these back.

=================================

Share buy backs only make sense when the NAV is massively ABOVE the current share price and therefore shares are being bought at a discount to NAV. A bit like a company buying back its own debt at 50p in the £1.

In this case the NAV is BELOW the share price so the board are literally using our money to buy £1 coins for £1.20 each. This should, if anything, force the share price down.

In a situation where the NAV is below the share price it is far better for the cash to be distributed to shareholders rather than used for uneconomic share buybacks.

The only reason to do this is to reduce the number of shares in issue to artificially increase the Earnings Per Share which i'm sure is a management target.....🙄

[sikhthetech] 13/4/2022 14:04

clarky
"It's very peaceful in here of late"

That's because the events are moving as expected, affordability more and more in headlines, HBs getting hit....

Did the buy back help PIs ??? No, a special divi would have been more beneficial as stated.

So all as expected
;-)

[ftir1] 13/4/2022 14:01

Just imagine where the TW share price would be if the moronic management weren't buying these back. If they were patient, they could buy them at under half the price.

Their incompetence is frightening!

[roguetraderuk] 13/4/2022 13:46

tw. getting v close to nav while psn is still some way off. psn tended to trade at a premium rating due to better roc. gaps here at 109 119.50 and about 124 so provide tradeable bounces at the very least imo.

[porsche1945] 13/4/2022 13:23

Persimmon and Barratt getting hammered more than these….㊂0;

[beckers2008] 13/4/2022 11:42

I have just received this newsletter from Winkworth Estate agents;

We hope you are all looking forward to the long Easter bank holiday weekend and can enjoy a few days off to relax and spend time with friends and family.

With the naturally busy spring period well upon us, the property market is buoyant. Rightmove has recently recorded another new price record as the average price of property coming to market jumped by 1.7% in March to £354,564, breaking through the £350,000 barrier for the first time.

While we are seeing more homes coming to the market, with properties being listed up 25% on the same week in 2019, demand is still extremely high with registered buyers 43% ahead of the same week in 2019, resulting in a continued mismatch between supply and demand. According to Rightmove the imbalance is the largest ever recorded for this time of year, with more than twice as many buyers as sellers. For those looking to move, it is therefore one of the best spring sellers’ markets, not just because of record price levels.

With competition for each property high, homes are selling fast, and our advice would be to sell now while the demand is there, taking advantage of the market while these conditions last. With the cost of living and inflation increasing over the next few months, we don’t know how long it will continue.

[clarky5150] 13/4/2022 09:55

It’s very peaceful in here of late 🤔

[beckers2008] 08/4/2022 23:58

BuyBadly,

Why are you not on the AZN BB?
Your short gone BuyShortBadly?

I know your only trying to help us poor longs as you purport to be our saviour!
But your really spout BS.

Bye Bye Buybadly.