Taylor Wimpey Share Discussion Threads

[gbh2] 17/6/2014 12:41

Adds up to uncertainty and that's the thing the market hates?????

[5bag] 17/6/2014 10:56

from ADVFN news, latest inflation figs:

The Office for National Statistics said the annual rate of inflation was 1.5% in May, down from 1.8% a month earlier. May's reading was the lowest since October 2009, when annual inflation was also measured at 1.5%.

BOE officials led by Gov. Mark Carney have signaled they intend to keep interest rates at historic lows until unemployment in the U.K. has fallen further and Britons' incomes are growing again.

Investors earlier this month believed a rise in interest rates wouldn't happen until early 2015 but Mr. Carney on Thursday hinted that borrowing costs might rise sooner.

Investors concluded that rates might rise this year, but signs that inflation is likely to stay below the BOE's 2% target for some time could once again push rate increases further into the future.

[gbh2] 17/6/2014 09:51

Problem with most newspaper articles is whether the writer has an axe to grind, guess that also applies to posts on advfn..........

I'd rather look at the financial strengths/weaknesses of a company and its products/services and put my money into those that have what I consider to be potential.

[1gw] 17/6/2014 09:32

Roger Bootle writing in the telegraph reads like a toned-down version of Taffee. The closest he gets to Taffee's hyberbole is the last sentence: "But anyone who thinks that residential housing currently presents an attractive medium-term investment needs to have their head examined – and their finances. "

I suppose it depends what you mean by medium-term. I remember Greenspan and his "irrational exuberance" years before the actual crash. I certainly believe there's value in the housebuilders at these levels and that results are likely to continue to surprise to the upside (see Crest this morning) for some time. However the evidence of the recent market moves is that the taffee/bootle view has some support.

[richardc77] 16/6/2014 11:23

Rates will rise very slowly, I suspect at no more than two 0.25% hikes per yr, until we reach 2.5%, probably around the 2018.

[gbh2] 16/6/2014 09:40

VAT has been 20% since the Tories & Libdums got in !

[bobsidian] 16/6/2014 09:36

"In my opinion interest rates should rise now by at least 1% with no further rises for about a year to see how things go...This would only effect the average mortgage by about £100 a month, IMHO this would not really have much effect on house hold income..."

The average mortgage rate experienced by mortgage holders is around 3.5%. A 1% rise would equate to around a 30% increase in monthly mortgage payments. A sudden increase in the cost of a mortgage by £100 per month would have a devastating impact on the current finances of the average household. What would be immediately lost to the broader economy would be discretionary spend which would once more propel the retail sector into a downward spiral.

Furthermore that 30% hike in the cost of mortgage finance would likely trigger a correction in house prices by at least 10%. And the scale of the correction would probably be much greater in London and the South East of England.

"The biggest Problem stopping my business from growing is VAT, I am in the building industry & paying 17.5% is to much private customers do not want to pay it. It should be reduced by 5% this would off set any future rate rise..."

Cutting VAT by the amount you suggest is more likely to bring forward further interest rate rises to prevent the economy from overheating. It is also unlikely to be favourably received by the debt markets and the credit rating agencies that a government is prepared to use public finances in the midst of an identifiable economic recovery to effectively fund interest rate rises whilst increasing the cost of new debt finance required to be issued to cover ongoing budget deficits.

[gbh2] 15/6/2014 08:23

New Buyer rates are already 3 to 5% so a bank rate increase increase would not necessarily be accurately applied to existing mortgages, hell even a 0.25% rate increase could trigger anything up an additional 1% imo!!!

[valedo] 14/6/2014 20:17

£100 pm hike in mortgage repayments immediately would be more than many could absorb IMO and won't happen. Needs to be a longer run in . Tories won't want much of a rise ahead of 2015 and will do anything they can to delay!

[valedo] 14/6/2014 10:18

Builders still safe as houses

Demand is only going one way, which is up. Labour and supply shortages are putting pressure on activity levels, which could well feed into any decision on interest rates. Most of the largest housebuilders have built up good land pipelines - bought cheaply during the downturn - and have cost bases under control. It would take a huge shock on the interest rate front to justify a "sell" case, so buy on dips.

MY ADVICE
Buy on weakness
WHY? Political pressure to increase the supply of new homes is only going to grow

hxxp://www.thetimes.co.uk/tto/business/columnists/article4119142.ece

[bobsidian] 13/6/2014 19:37

I suspect that once the Bank of England start the move northward in the base rate at a measured pace of say 0.25% every quarter, with wages rising sufficiently to absorb the additional cost to homeowners and renters alike, then this will allow housebuilders to have reasonable earnings visibility.

The problem is the forthcoming general election and the subtle pressure being brought to bear on the Bank of England to delay base rate rises. The longer that process is delayed the more likely interest rate moves will be less measured.

Even after stripping out buy to let mortgages from the total mortgages outstanding, it is quite startling to read that nationally on average one in three outstanding residential mortgages are interest only with that ratio rising to one in two in London, the South East and the South West of England. And with around 70% of those mortgages being variable rather than fixed, little wonder the nervousness of politicians about movements in the Base Rate.

[essentialinvestor] 13/6/2014 17:45

I think Bob is just adding some perspective, all be it in an overly dramatic way.

However we are now in to the 6th year of a bull market and have not had a wider
market equity correction for a considerable amount of time, it's overdue.

It may turn out that this afternoon was a buying opportunity, find out next week.

[shaws67] 13/6/2014 17:11

Bob must be related to toffee, imo

[gbh2] 13/6/2014 16:42

I was referring to the comment attributed to Warren Buffet, not the events of today or even this week!

[bobsidian] 13/6/2014 15:05

And when you look at the FTSE250 this is nowhere near a "Blood on the Streets" scenario. That index is merely back where it was on 27 May and is still above its 200 day Simple Moving Average.

For genuine "Blood on the Streets" scenarios take a look at the share price implosions that are ASC and BLNX.

It is currently hard to conceive of the impact on share prices were the FTSE250 to move back down toward 12,000 never mind 5,500 seen back in 2008.

[gbh2] 13/6/2014 13:35

"go against the market"

It's the Blood on the Streets scenario!

[knocknock] 13/6/2014 13:31

Consolidation of the big housebuilders is on the cards and the new enlarged company still probably wont tread foot in the valleys.

;;-)

[taffee] 13/6/2014 13:30

I think Warren Buffett was talking about buying tw in 209-2011...not
Now near the peak

Proj

If I'm talking rubbish then why is the share price falling and why haven't you
Sold at higher prices....what's the point of buying shares if you don't
Sell and bank profits?

[proj] 13/6/2014 13:23

shaw, cheers fella. ATB

[thegameofmoney] 13/6/2014 12:41

I always remind myslef to go against the market and buy when others are feerful and sell when others are greedy. Advice from the great Warren Buffet.

tgom