Taylor Woodrow Share Discussion Threads

[sruk77] 23/6/2007 23:08

Mervyn like to buy stocks on the cheap :^)

[markpun] 23/6/2007 09:33

Yesterday's trading: FTSE tumbles on King's comments
Geoff Foster, Daily Mail
22 June 2007, 7:40am
Isn't Bank of England Governor Mervyn King a bundle of fun? Barely a day goes by without him forecasting some kind of economic crisis or imminent rise in interest rates.

You wonder whether the man actually has a mortgage. And his constant gloomy predictions drive highly-geared dealers up the wall and more often than not spread panic among investors and homeowners.
His warning at the annual Mansion House Banquet that Britain could be facing a major debt crisis reinforced fears that UK interest rates will be raised a further quarter point to 5.75% in July. Shares took fright.

King's comments coincided with a heavy overnight fall on Wall Street after rising bond yields in the US revived concerns about higher global interest rates.

The possible collapse of two Bear Stearns controlled hedge funds over sub-prime loan exposure also gave markets the jitters. Down 85 points at one stage, the Footsie finished 53.3 points lower at 6596.

Interest rate sensitive sectors bore the brunt of the selling. Joe Public continues to see his disposable income substantially reduced by higher mortgage costs and bigger council tax, water and food bills.

The great British shopper is definitely pulling his horns in and summer sale signs are now commonplace in the High Street. Analysts fear that the impact on the consumer could be both deeper and longer lasting than investors are currently anticipating.

[markpun] 23/6/2007 09:14

From The TimesJune 23, 2007

OFT opens inquiry into the state of UK housing industryJames Rossiter, Property Correspondent
The Office of Fair Trading has launched an investigation into the United Kingdom's £20 billion housebuilding industry amid concerns over both the quality and time taken to build the country's housing stock.

The investigation will examine any evidence of cartel-like behaviour that may restrict the supply of new homes and fuel house-price rises, although OFT inspectors insist that they are approaching the inquiry with "no assumptions".

Research from the Royal Town Planning Institute shows that the nine largest residential developers have enough land with planning permission to build almost 225,000 homes. That is more than double the number of houses they build annually.

Government figures show that the number of annual housing starts in England for all housebuilders fell to 174,060 a two-and-a-half year low at the end of March. Building completions last year totalled 160,234.

Related Links
OFT raises threshold for merger probes
The Government has just launched a planning White Paper that aims to reduce the time it takes for developers to gain detailed planning permission.

Builders sometimes have to wait up to two years from the submission of an application until permission is granted.

However, the OFT will re- examine both this aspect of the planning process and, for the first time, the process for starting building work once planning is in place.

Simon Nichols, the OFT's senior team leader in charge of the investigation, said: "We don't have assumptions at the moment that there is any sort of collusive behaviour. What we see is weak supply and an increase in demand and wonder why that is.

"We are looking at the way that land which is suitable for development is brought through the planning system to the point where it gains planning permission and then look at how that land is converted into homes."

John Slaughter, director of external affairs for the House Building Federation, whose 300 members account for about 80 per cent of the industry, said he was "puzzled" by the investigation. "We have been calling for the efficiency of the planning system," he said.

The Callcutt report, a government-backed investigation into housing supply will be published in the autumn. It is believed that it will reveal that, for 97 per cent of housing sites, construction work starts within three months of the grant of planning permission.

The OFT will also examine customer satisfaction. A survey from the Housing Forum, published in the Government's Barker review of housing supply, showed that 83 per cent of new home buyers were satisfied with their purchases in 2003.

The HBF's own MORI-validated survey showed customer satisfaction levels of 77 per cent in 2007, up from 76 per cent in 2006.

The OFT's investigation could result in a number of outcomes ranging from encouraging firms to take voluntary action and publishing information to help consumers to a market investigation reference to the Competition Commission.

John Fingleton, chief executiv of the OFT, said: "This is the first in-depth examination of competition and consumer issues in new housebuilding."

Britain's housebuilding industry is dominated by Barratt Developments, Persimmon and Taylor Wimpey, the proposed merger of Taylor Woodrow and George Wimpey. Together they account for about 60,000 new home sales each year.

A spokesman for Barratt said: "As a volume housebuilder, Mark Clare, the chief executive, has made it clear that increasing our production is central to our growth plans. There are, however, a number of bottlenecks in the system, most importantly the availability of land and the complexity and speed of the planning process.

"Whatever the inquiry can do to tackle the issues and bring forward a greater supply of homes will be welcomed by housebuilders and house buyers alike."

David Orr, the chief executive of the National Housing Federation, an umbrella group promoting the interests of housing associations, said: "The OFT should explore penalties for developers who receive planning permission only to sit on the land for an unreasonable amount of time."

[8gamsby] 22/6/2007 18:08

MARKPUN Im with you 100% cant believe whats happened again this week .Believe also its to late for anyone else to spoil the merger.

[markpun] 22/6/2007 16:24

One Reason U.S. Real Estate Can't Crash
By Dr. Steve Sjuggerud
June 22, 2007

Greetings from Sligo, Ireland...

County Sligo is as close to the middle-of-nowhere as you can get.

We've been here in Sligo (pronounced "sly-go") for days now, and we can't much figure out what people do here.

It's your basic, regular town. Yet the average asking price for a home here in Sligo is 354,767 euros according to the May 2007 issue of Business Sligo magazine. At current exchange rates, that's an astounding US$475,368.

I couldn't believe it.

This trip was yet another reminder to me that U.S. real estate isn't that expensive when you compare it to real estate around the world.

In the United States, the median price of an existing home is US$220,900, less than half the average asking price in middle-of-nowhere Ireland.

This U.S. median price, of course, includes the expensive places – New York and California. If you look at just the Southeast, even including Florida, the median home price drops to only $181,100.

If you like rain, cold, and not a whole lot going on, Sligo is a fine place. I actually like visiting here. We've been lucky. It hasn't been as cold or rainy as it should be this time of year. But I'd much rather live in Florida. Amazingly, you can live in Florida for half the money you need in Sligo.

It's not just Sligo...

Irish house prices are up 251% since 1997, according to the latest issue of The Economist. Home prices from Britain to South Africa are up by hundreds of percent. Yet the same magazine says U.S. home prices are up by only 103% in the same amount of time.

Said another way: Sure, U.S. home prices have risen in the last 10 years, but not nearly as much as many other countries. Also, I believe that U.S. home prices were starting from a low base... they had room to rise.

Foreigners now think that U.S. real estate is dirt-cheap.

Tom Dyson is from London. He moved to Florida to co-write DailyWealth with me. He can't believe you can buy a three-bedroom, two-bath house a half-mile from the beach for less than $250,000. But dozens of them are available right now. "You can hardly buy a closet in London for that price," Tom says.

U.S. real estate is always in demand by foreigners. For many, it's a nice way to get some assets out of their own country and own something "real." If you doubt me, visit Miami...

This trip to Ireland has been a good reminder to me... there's an underpinning to Florida real estate that won't let it crash dramatically. And that's buying by foreigners. Europeans buy in Florida because the weather is nice and real estate is cheap. Latinos buy to get money out of their own countries. I doubt either of these buyers will go away anytime soon.

It may take years to "burn off" the supply of homes available for sale on the market now. So we may not see much price appreciation for a while. But I don't think we'll see a dramatic fall in prices either.

Yes, U.S. home prices have run up in recent years. But when you get out and see the world, you find that U.S. real estate is simply not that expensive for what you get.

The fears of a housing crash nationwide are overblown.

Good investing,

Steve

[markpun] 22/6/2007 15:38

I pray a bid comes in for this of company, this has been going down day after day, even PSN seems to be doing better. Market does not seem too excited with the merger.

Have a good week end all.

[judge jury] 22/6/2007 08:51

I honestly have no idea ... timing/trading is not my forte. However, I suspect that things will stay subdued as long as interest rate worries persist, which probably means most of the summer.

[markpun] 22/6/2007 08:40

Judge,

When is this going to turn round in iyo? News out of the US is that things are not that bad?

[judge jury] 22/6/2007 08:21

Interesting to see the OFT probe .... although I think it might prove to be a pointless exercise. The Barker Review went into the industry in a massive amount of detail and (surprise surprise) found that in order to increase the supply of new homes, the planning system needed to be overhauled.

In the meantime, nothing has changed because politicians are unable and unwilling to tackle planning.

I strongly suspect the OFT will come up with the same conclusion ... and I also suspect that the politicians wont be able or willing to tackle the planning system.

[markpun] 22/6/2007 08:15

Is it going to be an up or down day? that is the question. I really regret buying into thos POS. With the share price behaviour over recent days I am not surprised PIs are reluctant to buy. Any thoughts anyone?

Even on a rising market we go down.

Any way good luck to us suffering holders.

[markpun] 22/6/2007 07:09

Morning Folks,


Most interesting, the supply/demand....


From The TimesJune 22, 2007

A new map of England
Is Brown going to build in your backyard?Susan Emmett
Britain needs 200,000 new homes a year. Is Gordon Brown going to build them in your backyard? As the former Chancellor of the Exchequer prepares to move into 10 Downing Street on Wednesday, that is the question in the mind of every housebuilder in the country.

The Prime Minister in waiting has already signalled his intention to overhaul the planning system, build five new eco-towns and create a "homeowning democracy". But he must implement these policies fast if he is to convince desperate first-time buyers, squeezed homeowners and an increasingly jaded construction industry that he is a man of action as well as of words. "Every politician in the past 10 to 15 years has said that he will address housing issues," says Stewart Baseley, executive chairman of the Home Builders Federation (HBF). "The time for talk is over. It is time to take action."

Britain is facing a shortage of 60,000 homes a year, according to the HBF. A decade of debate since Labour came to power means that there is now a consensus that we need more houses. Even green campaigners now concede that this is so. What we still can not agree on is what type of properties these should be and where to put them. This is what Brown will have to decide.

Builders claim that only 10 per cent of land in Britain is being developed. They argue that there is no shortage of land, only a shortage of planning permission, and that more land needs to be made available if we are to meet the Government's target of building at least 200,000 new homes a year by 2016.

Background
Comment: The housing shortage
A new map of England
What a decade brought
Red tape to be cut for home extensions
Brown to build five eco towns
Last year, 160,000 new houses and flats were built. At the same time, more than 220,000 new households were formed. The Government also estimates that the number of households will continue to rise at a rate of 223,000 a year until 2029.

Aware that the provision of new homes was failing to keep up with the level of new households, the Government suggested four main growth areas for housing - Thames Gateway, Milton Keynes & South Midlands, London-Stansted-Cambridge-Peterborough, and Ashford - in its sustainable communities plan of 2003. It is also supporting 29 new growth points across the country; these involve new homes, new jobs, town-centre regeneration and higher design and environmental standards.

Government policy has produced mixed results so far. Although there has been a steady rise in home building each year since 2001 (when figures dipped to the lowest level since the Second World War), critics say that too many flats are being built at the expense of family houses. In the late 1990s flats accounted for about 15 per cent of new properties. The latest figures show that flats make up 45 per cent of all new residences built.

Meanwhile, properties are becoming smaller as developers cram more units into the tiniest of spaces, partly to boost profits and partly to satisfy government guidelines to increase building density. Since 2004 new developments have had an average density of 40 homes per hectare, compared with 25 homes per hectare in 2001. The building frenzy led to a glut of flats in some places and to calls from MPs to increase the building of houses to redress the balance.

The government guidelines on building density were subsequently relaxed last November to give local authorities greater flexibility over what homes to put where according to local need and demand. Builders are now free to construct more houses.

Flats, however, encroach less on the environment than a sprawl of suburban semis. Although the number of new properties has been rising steadily, the amount of land developed dropped by 35 per cent between 1997 and 2004. Builders developed only 8,995 acres of land in 2004 compared with 13,912 acres in 1997. But this trend is likely to be reversed if we start building more houses, fuelling the complaints that we are "concreting over the countryside".

Gordon Brown has already upset environmentalists with proposals to liberalise the planning system. Last month's planning White Paper placed a strong emphasis on economic development with its aims to streamline the planning process to cut delays to much-needed housing schemes.

But Marina Pacheco, head of planning for the Campaign to Protect Rural England (CPRE), said that that the proposals overlooked the needs of schools, hospitals, transport and the environment. "Planning is an holistic exercise that can't be looked at in one dimension," she says.

Brown's plans to boost environmentally sound building by delivering five new eco-towns and increasing the number of carbon-neutral homes by 2016 has left the CPRE equally cold because of the lack of detail provided. "We are not opposed to the idea but it is a drop in the ocean," Pacheco says. "Brown talks a lot about green issues but we never see the nuts and bolts that are needed to make this vision happen."

The CPRE is right to be sceptical. Eco-friendly building is not as easy as it looks. The builders who embarked on a much earlier environmentally conscious programme, the sustainable communities programme spearheaded by John Prescott back in 1997, discovered that their ambitious plans could easily be scuppered by issues such as the difficulty of sourcing sufficiently green building materials (in particular, windows). If the Millennium Communities Programme has taught us anything, it is that building "green" on brownfield sites takes a lot longer and costs a lot more. Building work on the Milton Keynes scheme, one of the seven projects around the country, will finally start this year, although the site was allocated in 2000. The state-of-the-art homes in the programme also cost between £3,000 and £10,000 more to build than the average home.

The real rub for developers, though, is that housebuyers are not prepared to pay that much extra for a greener home. Builders such as Taylor Woodrow taking part in the programme readily admit that it makes little sense to adopt the techniques learnt on the project to build on other sites where they can not charge an appropriate premium.

However, the biggest obstacle in Brown's way is not Nimbyism, the green lobby or even the builders but the very economy he put in place as Chancellor of the Exchequer. The strength of the property market over the past few years has given a boost to building in a way that no government policy ever could.

Developers were prepared to put up with delays in planning and stringent demands for social housing to be built alongside private homes because rising prices meant that they could still make a profit. But the housing market is slowing down, and homeowners are reluctant to move because stamp duty is too high. Moreover, potential first-time buyers continue to be priced out of the market. And, as property prices stagnate, there is less incentive for landowners to sell their land for development.

To compound the problem, Richard Donnell, head of research at the property data company Hometrack, believes that as construction companies fight to stay competitive in a tougher economic environment, we are likely to see a string of mergers in the building industry that will lead to a reduction in the number of new homes being built.

"The Treasury under Brown has done a lot to try to understand the housing market," Donnell says. "But policy is always behind the market. There is every chance of output declining over the next five years."

[markpun] 20/6/2007 12:47

There is still hope as mortgage applications on the rise...

Ahead of the Bell: Mortgage Applications

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WASHINGTON

New banking industry data will signal whether rising interest rates and sinking housing prices are scaring away potential home buyers.

The Mortgage Bankers Association on Wednesday will report its weekly index of home-loan application volume at 7 a.m. EDT.

The Market Composite Index, which last summer sank to its lowest level since 2002, has fluctuated this year as the housing market has cooled and defaults among homeowners with weak credit records have soared.

Interest rates are also on the rise, making home purchases less affo rdable. Mortgage giant Freddie Mac reported last week that 30-year, fixed-rate mortgages averaged 6.74 percent, the highest level in 11 months.

Despite these higher rates, the Mortgage Bankers Association said its weekly mortgage index for the week ending June 8 rose to 666.5, a seasonally adjusted 6.6 percent gain. Applications were up for home purchases and for refinancing mortgages.

A week earlier, the index fell 1.7 percent to 624.3 for the week ending June 1, driven by a percent decline in applications from homeowners refinancing existing mortgages.

The mortgage application index, which stood at 100 in March 1990, measures the number of home loan applications in a given week and is derived from a survey of major mortgage lenders, representing about half of the U.S. market. It does not include loans originated by nonbank lenders.

Big lenders have tightened standards for borrowers since February, when parts of the mortgage market fell into disarray. Lenders catering to home buyers with weak, or subprime, credit, have seen a spike in loan defaults, and many have gone bankrupt or sold off their subprime businesses.

As of the first quarter, Citigroup Inc. was the top subprime lender nationwide, followed by Countrywide Financial Corp., HSBC Holdings PLC, H&R Block Inc. subsidiary Option One Mortgage and First Franklin Financial Corp., according to statistics compiled by trade publication Inside B&C Lending.

In another sign of the housing market's troubles, the Commerce Department reported Tuesday that construction of new homes and apartments dropped by 2.1 percent last month to a seasonally adjusted annual rate of 1.474 million units, 24.2 percent below the level of a year ago.

[markpun] 20/6/2007 10:33

Morning Folks,

Home Builders Cut Output,
Lending Support to Prices
By KELLY EVANS
June 20, 2007; Page A2

The nation's home builders continued to cut production last month as they struggled to pare bloated inventories.

Housing starts fell 2.1% in May to a seasonally adjusted annual rate of 1.474 million from 1.506 million in April, the Commerce Department said. Starts were down 24.2% from a year earlier and 35.7% from their peak rate in January 2006.

Building permits, which are required in most localities before construction can begin, rose last month. But much of the gain was a result of permits for apartment buildings. Demand for apartments has been growing as rising interest rates and tighter lending standards have encouraged more families to rent a home instead of purchase one.


Building permits overall increased 3% in May, but single-family home permits fell 1.8%, while permits for apartments gained 17%.

The slowdown in building activity, coupled with reports of rising foreclosures and declining confidence among builders, could mean the tumbling housing market has yet to hit a trough.

"Things aren't going to get better anytime soon," said Drew Matus, senior U.S. economist at Lehman Brothers. Mr. Matus said that yesterday's report suggests that builders are trying to rebalance the market by cutting supply instead of prices -- a decision, he said, that is better for builders and for the economy as a whole. "We economists prefer to see a volume adjustment rather than a price adjustment," he said.

Falling home prices can make homeowners feel less wealthy, prompting them to reduce spending. That, in turn, can slow economic growth. "What you really want to see happen is a balance between supply and demand in the market," Mr. Matus said.

Other analysts, however, said further price cuts are inevitable as inventories of unsold homes keep growing, partly because of rising foreclosures. The inventory of existing homes for sale has risen nearly 25% since last year, according to the National Association of Realtors. At the current rate of sales, it would take 8.4 months to sell all the previously owned homes now on the market. That was twice as long as the average in 2004 and 2005.

"We're going to have to see far more significant price declines to start moving this inventory," said Richard Moody, chief economist at Mission Residential, an Austin, Texas, apartment-building owner, referring to the single-family home market. "It's taking really significant price cuts and incentives to move these units."

"I don't call it a recession -- because there's no official definition of a housing recession -- but we are in that league in terms of a setback," said David Seiders, chief economist of the National Association of Home Builders.

He said that much of the recent weakness reflects tighter lending standards, as well as the meltdown in the market for subprime mortgages -- home loans made to consumers with shaky credit. Climbing interest rates in the past month have also nudged up mortgage rates.

Mr. Seiders said the housing market is weaker than he initially thought, and he expects housing starts to drop throughout the rest of 2007. "The bottom has not yet been reached," he said.

[markpun] 18/6/2007 15:07

Bloody hell,

Got back in and I'm in complete shock, why the drop folks?

[markpun] 18/6/2007 09:01

Cheers Judge.

[judge jury] 18/6/2007 08:51

I only have a hard copy and it's quite a long article - too long to type out unfortunately. Essentially it questions whether the recent correction in the housebuilders is overdone but says that rising interest rates and an end to corporate activity in the sector have put a cap on the gains.

On Taylor Wimpey it says that both "are afflicted with below-par profitability and they're both exposed to the stumbling US housing market", suggesting it was two dogs getting together. It then goes on to say that the combination significantly strengthens the businesses (going through the merger rationale/synergies etc.) and says that TW is "a recovery play with the potential for earnings to jump with the US housing market recovers". Also, says synergies will probably be higher than the £70m stated.

It says the market will take some convincing that the deal is delivering but there's real upside potential.

[markpun] 18/6/2007 06:49

Morning Judge,

Could you kindly cut n paste or go into more detail pls.

[judge jury] 17/6/2007 20:49

In this week's Investor's Chronicle

[8gamsby] 17/6/2007 20:33

Where will i find the article .Thanks judge

[judge jury] 17/6/2007 20:14

Relatively good article in this week's IC on the UK housebuilders and the Taylor Wimpey merger

[8gamsby] 17/6/2007 19:51

Not looking to good for TWOD/WMPY.However i think the UK market is still fairly good