Hydrogen Economy
21 Sep 2016
Re: Gobbledygook, Hydrogen Economy! HU"When you start to put the figures back to 01 this shows that demand for new builds is pretty low on a historical context. " Check the article, in 70's well over 300k, 80's over 200k"If actual DEMAND (not want) is so high why is UK housebuilding at recessionary levels? " Who is saying demand is so high? Not me, I note that demand exceeds the supply- evidence for which is the increase in prices. I note also that builders have been shifting to higher value higher margin properties, to match the demand from the "haves" population, Government are pushing them to provide affordable housing to the less fortunate,"On the historical figures it hardly looks a healthy market." For buyers not, for sellers as long as supply can be maintained at or below demand it feels just fine. Why/how is supply being restricted Skills shortage - sure that's a factor, immigration has no doubt helped both sides of that equation and post Brexit supply and demand may be impacted. Biggest cause is I believe planning restrictions and reluctance of builders to flood the market.QE, collapse etc - yes probably one day, who knows whenH2It must be a skills shortage!!!! Notice these skill shortages didn´t exist prior to 08. Completions drop 40% since 2008, & then comes around a skills shortage.The stock markets & most other markets are reverse markets to the real world that are being distorted by reckless central bank policies.
Hardcore Uproar
21 Sep 2016
Re: Gobbledygook, Hydrogen Economy! When you start to put the figures back to 01 this shows that demand for new builds is pretty low on a historical context. On the historical figures it hardly looks a healthy market. The figures look even more shaky when you consider the manipulations of QE/ZIRP/government subsidies. The UK government has chosen to go down the U.S. subprime route. The trick is that central banks can hold the situation with ZIRP/NIRP/QE. There must be a very high statistical probability of another financial crash, UK house prices crash, BS/banks collapse confidence goes.If actual DEMAND (not want) is so high why is UK housebuilding at recessionary levels? It must be a skills shortage!!!! Notice these skill shortages didn´t exist prior to 08. Completions drop 40% since 2008, & then comes around a skills shortage.The stock markets & most other markets are reverse markets to the real world that are being distorted by reckless central bank policies.
Hardcore Uproar
21 Sep 2016
Gobbledygook, Hydrogen Economy! "I conclude that the underlying demand for housing will continue to grow. Economic circumstances, Govt. policy and planning process no doubt will impact to the actual sales in the short term and no doubt builders will slow down starts accordingly, but the Govt. cannot afford to let that situation prevail for long, policy will be used to stabilize and support the market the market as we have seen over the last few years."The whole issue is affordability. You mean the "want" will continue to grow not demand. I have been through this so many times. If a product is unaffordable, then there is no actual demand. You an gloss it over with % free top up loans, this is just kicking the can down the road. The whole issue about UK housing is affordability. The whole above paragraph suggests normal market forces. Since 2013, the UK house builders have been heavily subsidized, through huge injections of QE, cheap/free money. Even with free money you still have to pay it back sometime. Lastly to prove you are being selective with your evidence. If REAL supply/demand are in the mode you suggest why don´t you quote house transactions from say 2001-15? House sale transactions are no where near what they were in 2007!I conclude that you are just writing what you want or have been told by the mainstream media! House prices cannot keep inflating way above wage inflation forever!
Hydrogen Economy
21 Sep 2016
Telegraph Bit of and industry whine about planning restrictions on behalf of the smaller builders, but the chart of starts/completions is a reminder of how the numbers have declined dramatically since the 70s whilst the population has been growing at an increasing rate since 1980sYear, Pop Inc, House Completions2010, 499000, 1512202011, 525600, 1360102012, 419900, 1457802013, 400700, 1330002014, 491100, 138350 2015, 513200, 143410Average household size in UK is 2.4. I conclude that the underlying demand for housing will continue to grow. Economic circumstances, Govt. policy and planning process no doubt will impact to the actual sales in the short term and no doubt builders will slow down starts accordingly, but the Govt. cannot afford to let that situation prevail for long, policy will be used to stabilize and support the market the market as we have seen over the last few years.As the Telegraph piece shows there has been massive consolidation in the industry in the last few years, especially of small companies (1-100 pa) down from 12000 in 1987 to under 3000 now. They were contributing a sizable proportion of builds in the 80's, but not now. Fewer big Companies are in a much stronger market position, that leads to increased profitability and that is what we have seen. Fluctuations will no doubt continue and a major economic/market crash could change everything but I would not be looking at the housing market to start that this time.H2[link]
psmith64
15 Sep 2016
The wider market Sometimes you have to keep an eye on the wider market to get a more accurate picture of post Brexit UK.Todays turndown in the fortunes of John Lewis is an indicator that people are being more cautious with their spending.Already we are seeing a retrace in the markets and also here at Taylor Wimpey.Sticking to my philosophy at the moment to holding on to my pre Brexit cash and watching all from the sidelines until at least six months has passed since the referendum vote as by then I think we will get a more accurate picture of the situation.Brexit may mean Brexit to some but until we really know what it means everything is a little bit more risky than normal as some recent buyers to the market will now be finding.......Taylor Wimpey being one that has retraced by nearly 12 % in recent weeks.Good luck to those with the nerve to invest at the moment.
Frankers70
09 Sep 2016
Re: Home buyers demand remains resilient I feel the ftse is too high already at 6,800 plus. Perhaps a short term draw back to nearer 6,600 would give us some hope of a Santa rally to push us back up to near record highs. If you believe this then hang onto the cash for now. I sold 3,000 TW shares at £1.68 a few weeks ago but still hold 12,000 as the construction industry still has positive momentum and TW are paying a very attractive dividend (when including the special divis). GLA that are holding...
Dallara
07 Sep 2016
Re: Home buyers demand remains resilient When I last looked the resident chartist was looking for levels to support the ftse to 7300. Works fine with me if it happens since I haven some laggards that need grow before I can get rid of them (Tw. amongst them). But then I shall then be looking for out pretty sharpish since all I can see coming is the realisation of one or more global financial events that will pull the rug out from the whole lot and down it all comes. Not too worried since I am about half cash at the moment. Just a question of how far down it all goes and what level to get back in. And when!So Mr Hardcore I concur.
psmith64
07 Sep 2016
Re: Question for PSmith64? Eadwig....,Good question.ISO 9000 was the new big thing in construction 20 years ago and yes I do know some companies do implement it.I am not sure if TW do but I would almost certainly say they would operate some for of compliance procedures.I would also say out of the volume builders from what I have seen of the TW end product in general the finish looks good so they seem to be managing the building process pretty well.It will be interesting to see what the half yearly figures are like as my gut feeling is that things are slowing down a little and labour availability in general is much better than it was 12 months ago.I am continuing to watch from the sidelines until we get some hard fact post Brexit data.
Eadwig
06 Sep 2016
Re: Question for PSmith64? dazedandconfused,I take your point, and if you have aimed at cheaper housing that is within regulations, you will get cheaper materials used etc.My point is more to do with managing contractors and ensuring they are sticking to the standards/specs you have laid down.I would think this is of vital importance given that TW employ only about 4.5k people but complete about 3 times as many houses, was it last year? Obviously, they sub-contract extensively. I note complaints about TW housing have risen over the last 3 years, and are greater than the targets they have set themselves - which I think are pretty low at just 90% without complaint within 8 weeks (I think it is) anyway.I'm assuming all the big builders work pretty much in this way, by the way. I've surprised myself at my level of ignorance in this area, actually, given how much I have invested in house builders in the past and present.
dazedandconfused
06 Sep 2016
Re: Question for PSmith64? Taylor Wimpey have a substantial Environmental Standard & Handbook, that is rigorously applied (internal Director pressure on Regions) and managed/written by an external Consultant - who also represents them on House Builders Federation technical issues. That Enviro standard deals with the re-use of materials and excavation soils, as well as managing spillages and air/noise emissions. It will be to ISO14001. However, as the Construction Industry wisely knows, BS and ISO quality standards just ensure you do/manage what/how you say you undertake to do it, not that it is of the Best Quality!
millwallfan
06 Sep 2016
Re: Question for PSmith64? Not really an expert in this area but a large degree of quality control is through the planning and building control process. Qualified surveyors check compliance with build quality at every stage from footings upwards - even for a small extension. Such checks also apply to any work undertaken by subies. In addition each large builder will have its own qualified project managers and other specialists for purchasing etc. To ensure both quality and prpgress timelines.
JohnyCash
06 Sep 2016
Big Profits for Housebuilders The evidence is still there - the housing market continues to remain very strong!Brexit has had zero effect.At some point the de-rampers will have to roll over and concede in the face of consistent bullish news for the house builders !!>>>>>>>>>>>>>>Redrow, the FTSE 250-listed housebuilding firm, brushed off concerns about the Brexit vote as it reported a record 23pc increase in profit.Pre-tax profits climbed to £250m, compared to £204m last year. Revenue soared 20pc to £1.38bn, making 2016 its third consecutive year of growth.Steve Morgan, the group’s chairman, attributed this climb to a 17pc rise in legal completions to 4,716, spurred by Help to Buy - the Government scheme that enables first-time buyers to get on the property ladder.Rising house prices also helped: in 2014-5, Redrow’s average selling price was £269,800; this rose to £288,600 this year, a 7pc increase that is roughly in line with the 8.7pc rise reported nationally by the Land Registry.Redrow's chairman, who is the former owner of Wolverhampton Wanderers FC, said that the growth of the business had allowed him to take on more staff. Headcount now stands at close to 2,000, having been little over 1,600 a year ago.Reporting a current total forward order book of £897m — up 51pc on last year — Morgan added: “Sales in the first 10 weeks [of this financial year] are very encouraging and up 8pc on a strong comparator last year.”During the year, Redrow opened new offices in the south east and North London, adding to its 11 existing divisions. “Our divisions in the south grew most strongly in the year,” said John Tutte, chief executive. “It is pleasing to report that the new south east division made a valuable contribution to the group's results in its first year of trading.“The group is in good shape and well-positioned for the future. I am confident 2017 will be another excellent year for the business.”[link]
Eadwig
06 Sep 2016
Question for PSmith64? psmith64,Please could you help me get to the bottom of something?Does the construction industry comply to any quality control standards such as BS 5750 or the ISO 9000 series equivalents?I can't see any sign of it and yet most companies, including TW seem to use many, many sub-contractors. Ensuring your sub-contractors also comply to quality standards is a big part of your own quality standards, and helps to cut out delays, the use of sub-standard materials or workmanship etc etc.I've always assumed that it is the case, you could barely get by in manufacturing, for example, if you hadn't upgraded your whole business to comply with the latest standards as part of your own quality systems. If you didn't comply yourself, vast amounts of work wouldn't be open to you to tender for etc.After some remarks made on another board I had a look at a couple of builders web sites, including TW and can see no sign of any such certificates being displayed, for example. I thought I would ask you, having been a part of the industry for many years, you will probably know if builders have to comply to quality controls, or if there was ever a time when a push/fashion swept the sector for quality control systems to be adopted?
Hardcore Uproar
31 Aug 2016
Re: Home buyers demand remains resilient You don´t read& are not influenced by the mainstream press Mr. Smith? Yet you wish to blame Brexit & not examine the wild monetary policies of central banks? You speak of "slow down" since July. Turnover leading up to the BREXIT were hardly roaring. Sales of houses are no where near what they were in 2006/7. Under normal healthy market conditions you would expect turn over to be high. The market post 2013, very few sellers/buyers. Perhaps no sellers because there is little to no yield anywhere else. How can BREXIT, affect UK housing? Judging by the UK current account the UK is sucking in German exports The UK economy is living off the backs of others. These are not normal market conditions, variables have been highly manipulated, it cannot last forever!
psmith64
31 Aug 2016
Re: Home buyers demand remains resilient To be honest Eadwig.....I am so disillusioned with the construction industry over the last 10 year's especially and how it is affected by things out of its control I am speeding up the process of leaving an industry I have been involved with for 36 years.Don't get me wrong as financially because I have worked extremely hard over those years it has looked after me well.Brexit was really the last straw because I firmly believe as things unfold over the next 12 months we will all see what a dramatic affect Brexit will have on the industry across all sectors.I don't get my information from the press I speak to the many contacts I have in the industry and a picture is emerging that things are continuing to slow down since the vote on 24th June.I intend over the next 12 months to sit mainly on cash and keep an eye out for opportunity should it come along.Persfinally I won't be investing in the cinstruction sector for the foreseeable future and certainly not until we learn exactly what Brexit really does mean.Good luck if you co!ntinge to hold.
