Taylor Wimpey Share Discussion Threads

[jugears] 22/5/2024 17:53

DVD, two years ago was a once in a life time year caused by the aftermath of Covid, I've said before that the cycle doesn't continue indefinitely, but I'm now looking to the next one starting, I think an election is better sooner rather rather than later & whilst the markets tend to prefer Conservatives as I do but you have to admit that since Boris they have achieved nothing & Rishi has been the second worst Prime minister the country has ever had, Liz being the first. TBF I have done very well under Labour in the past & whilst I would never vote for them it is definitely time for a change, I'm sure that the the markets will initially over react but I have plenty of spare cash to invest when it does, just be mindful Vistry are now working on much lower margins so need to build greater volumes as building for a third party hence why they have HAD to ask suppliers for 10% discount & whilst VTY are applauding them selves, Suppliers & contractors aren't,( I know my old company has told them to pay the price or go somewhere else,not that they were a very big customer anyway. It only needs a slight up lift in private house builds where contractors make much larger returns & can afford to pay higher trade rates & things could turn very bad for VTY very quickly, add to that the fact that most housing associations have cut by about a third the number of homes they plan to have built over the next few years (due to an extreme lack of funding & the cost of building new houses), I did have a punt on VTY against my better judgement & TBF have dene very well but am not tempted to put in large sums of money long term here because if it does go wrong it could take a long time to return to private house building, either way that is very good news for companies like TW with even less competition in the private house building sector

[kreature] 22/5/2024 17:49

“ I bought a 2 bed house for 34k in 1997 sold it for 54k 2 years later( now worth 215k), I bought a 3 bed……230;.. “

……..that izz fazzcinating

[danvandan] 22/5/2024 17:25

sunshine, is that true? Do people really stop buying houses during an election? How come?

[danvandan] 22/5/2024 17:22

jugs, none of your responses contradicts what I've said. And the proof of the pudding is in the fact that buyer volumes are much, much lower now than they were two years ago. TW needs volume sales. Lower volume means lower earnings. H1 numbers coming in 10 weeks. A labour govt, most probably, coming in six weeks.

[sunshine today] 22/5/2024 17:20

Traditionally the housing market stops dead during an election.

Add the fear of a Labour Govt, ( it’s only the rich that can afford to buy a house.)

[danvandan] 22/5/2024 16:32

Oh wow! Just seen it. Could be good news for Vistry though.

[danvandan] 22/5/2024 16:29

How so sunshine?

[sunshine today] 22/5/2024 16:25

Umm, today’s news has just bust the myth of a better 2nd half.

[danvandan] 22/5/2024 16:12

jugs, I know that you don't buy into the CURRENT argument, because you are happy with a longer timeframe. I am talking about the shareprice this year.

Taking your other points one by one:
1. Buyers will not return in large numbers - the housing market has experienced a shock. Most people taking out a mortgage today have never known high interest rates. The mortgage lenders are also recalibrating risk and insisting that borrowers factor in their capacity to make mortgage payments if rates rise to the kind of levels we have seen in earlier decades. Crucially, people at the bottom of the pyramid are priced out of the market. Without new buyers coming in, prices further up the pyramid will stagnate or drop.

2. There is no housing shortage. The UK has a million unoccupied properties. The indigenous UK population is shrinking because birth rates are BELOW replacement levels. And that is because people cannot afford to have children and that, in part, is because homes are so expensive (everything is connected). A shrinking population needs fewer homes. Inward migration is keeping numbers up, but that can change very quickly and a lot of GB News readers want it to.

3. People did NOT 'manage quite well' when rates were 15%. Repossessions were common. When interest rates spiked, people lost their homes and houses were auctioned off at bargain prices; great for people with cash, not so great for people at the bottom of the pyramid. Many people laboured under negative equity for many years. High interest rates are a curse that drags money out of the real economy (slightly better for savers though). Businesses were crushed, unemployment was high at various times, everything was expensive, the standard of living was much lower than today.

4. Property has doubled in value since the GFC; I don't disagree. BUT the law of large numbers shows that prices will revert to the mean. If they've spiked higher in one decade, they will drop or stagnate in another (ie most probably this one) as they have done before.

5. Wages have gone up - yes, but nowhere near enough for new homeowners to support current mortgage rates. If wage inflation continues, eventually people will afford higher prices - we are in agreement on this - but it won't be this year.

[beckers2008] 22/5/2024 15:42

Sikhthetech,

At least 30% pay cash for their properties in the UK and those remaining have less than a 95% LTV ratio.
As your always banging on about an affordability crisis, lol!
Please provide a breakdown of the figures because you seem to imply that you know every individual's debt value, lol!

Now, when is your each and every year's (for the last 6 years) house price crash gonna happen?
Lol, just lol!

[jugears] 22/5/2024 15:07

DVD,Thanks for your thought but I don't buy into it, at some point rates will fall & buyers will return & that is going to create a huge housing shortage as there is no spare new housing stock to cover that demand & we all know what happens when demand out strips supply, anyway we all managed quite well with 5/6/7/even 15% mortgage, house prices may have gone up but so have wages to cover higher costs.
In an ideal world property would rise by a steady 2-3% in the uk, but since the financial crisis you would be hard pushed to find any property that hasn't doubled in value & there doesn't look like a frenzy to sell property anytime soon which will not help property prices fall, not good for first time buyers but it doesn't effect property owners up sizing or downsizing as they will have made a very good profit on their existing property ,of course you seem to assume that people are taking out large mortgages which is not always the case & as we all know a third of buyers pay cash, IMO this number will get bigger in the future, everyone has different financial circumstances so it is not possible to say who can or can't afford a mortgage. several of my contacts has said that the higher end houses 3/4/5 bedroom are the most sort after at the moment anyway.

[danvandan] 22/5/2024 14:41

sikh, looking back over the posts on this board over the last couple of years, it seems that you and jugears have become locked into eternal keyboard warrior combat. You both have my sympathy and I have to admire your staying power sikh; the shareprice has confounded rational argument. Who could have guessed covid would have thrown up such a surprising buyer dynamic?

I think you will be proven right eventually - all good things come to an end - and my bet (with mixed feelings) is that it began last year for the house builders and will accelerate this year.

[danvandan] 22/5/2024 14:34

From GB news... yeah, ok. Maybe an opportunity for some people to cash in and put the money into the stock market or a high interest bond or whatever, because property will not be increasing in value the way it has for the last decade. A better measure of actual sale prices will come from the mortgage providers.

The more important metric though is buyer volume. TW needs to sell 10,000 houses this year at good prices just to stand still. Maybe they'll do it, but the pressure is on. H1 results in black and white in 10 weeks time.

[beckers2008] 22/5/2024 14:24

From GB News...

House prices have risen across the UK, which is good news for Britons looking to sell.

The latest Government House Price Index released today reveals the areas where you will get the most for your property.


On average, UK property values are up 1.8 per cent on this time last year, and up 0.7 per cent between February and March 2024.


Property in Scotland has increased the most month-on-month and values are up 2.3 per cent on last year, to £191,678.

House prices are highest in London.
Despite having the biggest increase, it is the second most affordable place to buy a property in the UK. London had the biggest drop - with prices down 0.9 per cent - yet the capital has the priciest homes overall.

Regions with highest house prices

London - £499,663

South East - £373,223

East of England - £341,979

South West - £316,262

West Midlands Region - £246,298

East Midlands - £242,223

North West - £216,501

Wales - £213,753

Yorkshire and The Humber - £209,868

Scotland - £191,678

Northern Ireland - £178,499

North East - £158,569

The average property price is £282,776, up from £277,855 in March 2023.

Detached properties will fetch the most and have had the biggest increase in price, jumping from £429,319 to £440,085
- Guess what Wimps builds, lovely jubbly!

[sikhthetech] 22/5/2024 14:17

Jugears
"I do not believe your friend bought a property for 20% less than 2007 unless the house was overvalued then"

It makes no difference if you believe me or not. My opinions are based on my research, which includes following the housing market in UK and other countries.
The fact the HB newsflow has been as predicted is all that matters.

"Can never understand the the markets I"

That's your problem, you've tunnel vision and have no concept of how markets, housing market, economies, govns etc work.


"Why Don you just face it against all the odds of the last four years New houses are still selling & property price are 1% higher than a year ago"

Have you seen the huge incentives offered by the HBs to entice buyers? As well as lenders needing to be competitive. The govn encouraging longer term mortgages....

It's a hyped market.

[danvandan] 22/5/2024 14:04

The BoE's reluctance to immediately reduce rates makes sense when you remember that the very low rates that we've had for the last 15 years were a response to the global financial crisis. They have been UNNATURALLY LOW. Take a look at rates over the last 50 years, a period where average inflation coincidentally ran at about 5%, and you'll see that even 5% was a very low interest rate for this period. Rates were typically much higher.

[danvandan] 22/5/2024 13:38

Fixed rate mortgages are charging about 6% interest. Before the rate rises, fixed rate mortgages were about 2%. Today, people are having to pay roughly £12,000 a year more to service a new £300k mortgage. In terms of AFFORDABILITY, a house would have to be about £72k cheaper than before for monthly mortgage payments to be the same as they were a couple of years ago. It will take a long time for a price drop of that scale to work its way through.

The BoE was mostly moving the rate up by 0.25%. Even two cuts of that size will only bring mortgage rates down by 0.5%. It will NOT be like turning on a tap for the housing market. Buyer sentiment will need to change too. The message has finally landed with buyers - mortgages can get expensive very quickly. New homeowners will only trickle in. Eventually, wage inflation will close the affordability gap, but it won't be this summer.

It might take a month or two, but this realisation will hit the shareprice soon.

[beckers2008] 22/5/2024 10:54

Currency analysist summary following inflation figures...

"The pound (GBP) traded in a wide range yesterday as economic optimism and Bank of England (BoE) interest rate cut bets pulled the currency in different directions.

While the International Monetary Fund (IMF) raised its 2024 growth forecast for the UK, it also said that the BoE should cut rates two or three times this year.

This morning, the UK’s latest consumer price index exceeded expectations. Both headline and core inflation eased less than expected in April, with the former dropping from 3.2% to 2.3%, versus forecasts of 2.1%. The pound has leapt higher in response as markets trim BoE June rate cut bets."

As expected...

Late October 22, I posted
Imo, BoE to cut base rate from currently 5.25%,(not 6%). Starting in Q3 2024.

[martyn9] 22/5/2024 09:43

No doubt the share price will rise tomorrow, all down to fickle traders.

[laurence llewelyn binliner] 22/5/2024 08:52

#Jugs, the market will always sell off if the numbers do not hit the consensus, the drop to 2.3% from 3.2% is a massive step forward IMO.. rate cuts will follow after a month or 2 of stability is reported around 2%..

The BOE have history of going forward looking in the rear view mirror, most of the inflation that is left is driven by the higher home ownership / rental costs caused by high interest rates (CPIH) so it will reverse after the 1st cut has sunk in..

[jugears] 22/5/2024 08:32

Can never understand the the markets I mean look at Ocado its never made a profit lol

[beckers2008] 22/5/2024 08:25

Kreature or should I say Joseph Sheedy, lol!

How's your short from the 10th November, lol, just lol!