Taylor Wimpey Share Discussion Threads

[127tolmers] 27/6/2011 17:10

Daily Express 27/6/11

RECORD low interest rates have prompted a summer surge in sales to revitalise Britain's housing market, experts said last night.

Estate agents have recorded an 11 per cent jump in buyers this month helped by an increasing number of low mortgage deals and more realistic asking prices from home sellers.

June so far has seen the highest number of sales in three months, according to a report today by property analysts Hometrack.


The property experts say they expect the sales increase to continue this summer as interest rates are kept low and lenders continue to pump out a rash of cheap mortgage deals as a result.


The improvement comes as welcome news in the face of the traditional seasonal slowdown
Richard Donnell


Despite rising inflation, the Bank of England kept the base rate at a record low of 0.5 per cent for the 27th month in a row at its June meeting and lenders have already embarked on a round of mortgage cost-cutting as the threat of rate rises recedes.

There have even been predictions of interest rates staying low until 2014 – a move likely to further ratchet up demand and boost the property market.

Michelle Slade, of price comparison website Moneyfacts, said: "Earlier this year the market expected a base rate rise around May and mortgage rates started to rise. Now any rise looks a way off and a number of lenders are clambering over each other to offer the best deals.


"So much so that average fixed and tracker mortgages rates have hit their lowest level since Moneyfacts began recording rates in 1988.

"This combination of competitively priced mortgages and properties being advertised at more realistic levels has given a much needed boost to the property market.

"Not only that, but the longer base rate remains at 0.5 per cent the more likely home buyers and sellers could see mortgage rates fall further."

Richard Donnell, director of research at Hometrack, said: "The first six months of 2011 have seen the housing market holding up better than many had expected.

"Low transaction volumes, low mortgage rates and forbearance by lenders limiting the number of forced sales have all played their part.

"While average prices have slipped back by 0.1 one per cent in June, sales volumes have increased off the back of higher demand and greater realism over achievable prices on behalf of sellers.

"With estate agents keen to maintain sales volumes to support revenue, the improvement comes as welcome news in the face of the traditional seasonal slowdown."

Economist Vicky Redwood, for Capital Economy, said she expects the pressure to raise interest rates to recede as overall inflation falls next year, boosted by the economic recovery. "We are not expecting interest rates to rise now until 2014 at the earliest," she said.

The Hometrack report provides further evidence that demand for house buying is on the rise again with estate agents taking on more potential purchasers drawn to the market by cheap mortgage deals.

There are now a host of new two-year tracker mortgages below two per cent while Barclays have put a new fixed rate deal of just 2.78 per cent on the market. The Post Office has slashed its interest charges on a range of fixed rate and tracker deals by up to 0.64 per cent and the Nationwide has also reduced its rates, as has taxpayer-owned Northern Rock.

The Hometrack report also states that instead of demanding the high prices they expected in the boom years, sellers are curbing their financial expectations to sell their home quickly and move on themselves. The strategy is working with 93 per cent of sellers getting asking prices.

The improvement in activity in the housing market in June was also the result of a bounce back after a slump in May when viewings were disrupted by bank holidays around Easter and the royal wedding.

London and the South-east have seen the strongest growth in demand from buyers, while Yorkshire and Humberside and Wales have seen the lowest increases.

[sir rational] 27/6/2011 11:28

Not much to say ;-)

[shaws37] 24/6/2011 21:08

JJ :-) wish it was like that.

[jibba_jabba] 24/6/2011 20:50

I asked someone today about TW, they sent me this..

Any idea's..




It is silent until the last few seconds...!

[sir rational] 24/6/2011 11:46

Banks will drag us down over here - fears about their lending being restricted I guess

[sir rational] 24/6/2011 11:35

Dividends

The Board did not feel it appropriate to propose an interim dividend for 2010. The uncertainty in the wider economy has eased somewhat during the second half of 2010, however, we are not proposing a final dividend for 2010 (2009 full year dividend: nil). We will continue to review our dividend policy in the light of Taylor Wimpey's financial position and prevailing economic and market conditions in the future.

[fewdollarsmore] 24/6/2011 11:31

Use the cash to buy some nice cheap land no need to bring in divi until 2012 imo...

[smurfy2001] 24/6/2011 10:46

Even a 0.5p dividend would be a great start. They will certainly be in a better position after the disposal but maybe they will still want to be cautious and review dividend payments in 2012, when margins have finally increased.

[sir rational] 24/6/2011 10:46

...and completion of the TM deal is the key to that. Once the uncertainty has been removed, the BS will be in a much better position - whereas it would have been imprudent to start talk of reintroducing the divi BEFORE, that is not the case AFTER...

[127tolmers] 24/6/2011 10:32

Re BKG, a TW. announcement on future dividend policy starting with a samll payment in 2011 would give a welcome boost to SP

[slytherin] 24/6/2011 10:01

A little reminder (from March) of the TM context - reduced leverage, but not debt-free:

====================================================================
TMM's $955m (£595m) all-cash offer, which is awaiting shareholder approval, represents only a small discount to the combined net asset value of the Taylor Morrison and Monarch brands under which the housebuilder trades.

It is also at the top end of what Taylor Wimpey had expected and comes in the wake of grim data on the US housing market, where distressed home sales still account for 40 per cent of all transactions.

Confirming the deal on Thursday, Peter Redfern, Taylor Wimpey chief executive, said: "The sale will provide us with a strengthened balance sheet and increased financial capacity to invest in the UK and to pursue our strategic aims of focusing on margin growth."

Investors welcomed the deal, pushing Taylor Wimpey shares 2.4 per cent higher to 42.28p in early London trading.

Taylor Wimpey has said in the past that it will use the proceeds to pay down some of its £660m of debt.

However, according to people familiar with the housebuilder's thinking, it will split the money raised from the sale and use half as firepower to invest in new land and acquisitions.
======================================================================

In my view a lot of it will disappear into working capital, with a small reduction in formal debt, as trade creditors looked to be extremely stretched to me. Maybe this is why the sale is so important and the share price has stayed low. But hopefully the company will also be managing its land banks down a little to release cash for working capital.

[sir rational] 24/6/2011 09:58

Get in quick

[imastu pidgitaswell] 24/6/2011 08:55

Good results and outlook from BKG today - they are a bit different, having been intelligent enough to forsee the downturn and to have a strategy of returning cash to shareholders, but they do share the same basic method of generating cash as the other builders.




PS - Novel idea - running the business for the financial benefit of the shareholders, it'll never catch on...

[sir rational] 23/6/2011 18:35

DJIA turning up...

[shaws37] 23/6/2011 17:13

Sir R. Yeah it was pessimistic, this market is driving me that way.


I need a few pints of Mythos then i'll be optimistic again. lol

[spennysimmo] 23/6/2011 16:58

Question is, "IF" there is a spike on TM announcement then it will be yesterday's news very quickly. The dilemma will be to either hold, or sell on the spike with a view of buying back as the news and share price dies down and gain free shares.

[sir rational] 23/6/2011 16:56

That's a bit pessimistic.

Optimist in me says TM will complete - as already announced - and trading is satisfactory - as already announced - and progress towards double digit margin is being made on track - as already announced...

[shaws37] 23/6/2011 16:52

Probably wont see 40+p now until 2012.

[imastu pidgitaswell] 23/6/2011 16:40

Back to square 1. Pity, thought we had a higher high and then...

I do hope this deal completes before the Greece thing implodes - not a great time to be in heavy debt. Uuuurgh.

[sir rational] 23/6/2011 13:42

I'm not going to let an inconvenient fact get in the way ;-)

They said by the end of Q2 and my big old gut says 30th June.

[spennysimmo] 23/6/2011 13:37

hmmm, we can't be sure of a TM announcement. It would make sense and would tie in but we don't know.

[sir rational] 23/6/2011 13:13

lol

TU and TM completion announcement on 30th June

[spennysimmo] 23/6/2011 12:32

The boat if you aren't quick ;-)

[fewdollarsmore] 23/6/2011 12:25

Sir - Why do you say it is going to be a good few days for TW.? Have I missed something?

[sir rational] 23/6/2011 11:48

Going to be a good few days for TW.