Eadwig
31 Aug 2016
Re: Home buyers demand remains resilient psmith64, "hard fact like the above"The problem is hard facts are always delayed, often by 3 or more months. Meanwhile soft facts, like confidence surveys etc may be extremely affected by short term sentiment and even relief that nothing awful appeared to happen post the Brexit vote.I'm constantly amazed by the ignorance of not just everyday people, but even politicians, that we haven't yet begun to feel any real impact/benefit from Brexit in the real economy yet. Some seem to think its all behind us.Unless you've just been abroad on holiday or had a lot of investments in commercial property. Then you'll be finding yourself 10-20% worse off than you may have been bargaining for.Outflows from commercial property funds have continued in August, but slowed from the July levels, I saw reported yesterday.I'm still heavily involved in property. I believe there will be massive government expenditure announced soon to boost new build housing. The rumour is that smaller companies will benefit most - but I'm not sure the government will be able to hit its targets without the help of the larger builders too.It seems likely that some smaller construction companies (E.g. Henry Boot) may well benefit from infrastructure project announcements also. Any views on that?
psmith64
31 Aug 2016
Re: Home buyers demand remains resilient And then JC you get hard fact data like this released....[link] to stay on the sidelines for the moment having taken pre_brexit profits earlier in the year.We need at least 6 months post Brexit economic data I think before we cam start to draw any conclusions.Most companies reporting of late are not able to fully give any real long term indicators at present but hard fact like the above do not appear to paint as rosy a picture as most post Brexit reporting.Seems to me that most reporting of late is a little more optimistic than what market data is suggesting.A beliece a little caution is still sensible at present hence I am still sitting mostly on cash after an exceptionally good run the last few years.
Eadwig
17 Aug 2016
Re: Amazing! - Cash - Dividend Cover Eadwig, "As our farmers wont survive without the £3.5Bn subsidy a year the EU forced us to give them, there wont be any difficulties.There will be a lot of non-profitable farm land coming on the market though."There is now talk in Westminster of retaining the subsidies until 2020. Unsurprisingly the NFU believes that the subsidies should continue and increase as 'food security' is as 'important as the environment' and that farmers do a good job looking after the environment.None of that sounds like "Brexit means Brexit" to me, it sounds like more of the same. Obviously government want rid of these subsidies at some point, even a Tory government (traditionally great friends to farmers and land owners).I would urge board members of all the major house-builders to be prepared for a rush of prime, green field sites coming onto the market at any point from 2017 onwards. So far farm land has already dropped 2.7% in cost, and much larger drops are now forecast.House builders are currently buying less land, green field sites have dropped 4% overall, prime central London is down 9% (blamed mainly on the rise in stamp duty), but urban brownfield sites remain growing at 9% in cost.
JohnyCash
16 Aug 2016
Home buyers demand remains resilient Just when will the markets wake up to the fact that the new build housing market has shrugged off any Brexit concerns ?!!! >>>Home buyers' demand 'resilient', says Bovis, as it raises dividendBovis Homes shrugged off worries about a slowdown in the UK property market by reporting a “resilient” level of interest from home buyers after the EU referendum.The house builder enjoyed a 15pc increase in pre-tax profits in the first six months of 2016, to £61.7m, compared to the £53.8m it made in the same period last year. In response it raised its interim dividend 9pc to 15p a share. The FTSE 250 company said that it saw a slowdown in home buyers reserving homes in July, after the referendum, but that rate has since improved. David Ritchie, chief executive, said: "There was a two- or three-week period in early July when rates were impacted by the EU referendum, but now sales rates have rebounded to normal summer positions."The market at the moment does not indicate any negativity, it feels like a normal market."Bovis, which builds three-quarters of its homes in the south of England, outside London, added that it was too early to judge the impact of the EU referendum on the UK housing market. It also increased the number of homes it completed by 5pc to a record 1,601 properties. It has already sold 90pc of the homes it planned to offload in 2016.Mr Ritchie said that the company’s strong forward order book meant it would continue to grow profits.He added: “While it is too early to judge the impact of the EU referendum and the Bank’s monetary policy response on the UK housing market, the underlying market fundamentals for UK housing remain positive. “We have been pleased with the resilient level of interest shown by potential home buyers contacting us. Our robust balance sheet, with debt lower than last year, means that we are well positioned to continue to take advantage of prime land opportunities at potentially higher returns.”Bovis’ debt fell from £59m in the first six months of 2015 to £8m in 2016, and its revenue was up 18pc, driven by a 14pc rise in average sales prices to £254,500. This pricing level means that homes can be bought using the Government-backed scheme Help to Buy, which offers equity loans with a low deposit. Bovis will also be able to take advantage of the Government’s new Starter Homes initiative, which provides homes at a discount to first-time buyers.Anthony Codling, an analyst at Jefferies, said: “The availability of Help to Buy mortgages coupled with a more robust supply chain underpins the group’s confidence in achieving the full-year result.”He added that there was “roughly two thirds of profits to come in the second half (backed up by a strong order book)... the second half of the year is already better looking”.Shares in house builders remain depressed below pre-referendum highs. George Salmon, an analyst at Hargreaves Lansdown, said: “Recent surveys show confidence in the UK construction sector has fallen sharply since the vote, so it’s not hard to see why shares across the housebuilding sector are still well below their pre-referendum levels.”He added: “Looking forward, the decision to raise the dividend is a sign of the group’s confidence, however investors should be mindful of the group’s struggles with controlling labour costs, which have held back profit margins in recent years, and which look set to continue.”[link]
Eadwig
13 Aug 2016
Re: Amazing! - Cash - Dividend Cover "there is some concern that the French will insist on searching every lorry and container that leaves the UK via Folkestone and Dover"Why would the French employ people to do that? What could we possibly be exporting that would harm France? If France wants to put pressure on us they can just turn the lights off at times of peak demand, anyway - far easier and much more attention grabbing.The only thing the French would be bothered about us exporting would be certain foodstuffs. As our farmers wont survive without the £3.5Bn subsidy a year the EU forced us to give them, there wont be any difficulties.There will be a lot of non-profitable farm land coming on the market though. The green belt concerns and planning wrangles will soon be distant memories, the green belt can even be expanded. Hurrah! Everyone's a winner. Even the farmers who can retire on the cash they get for their land (they never lose out do they?)TW should be talking to all farms left within the M25 circle right now, lining them up for the future. Also those surrounding Cambridge, Reading and the M4 corridor are obvious early candidates to target.
MartinDrew
12 Aug 2016
Re: Amazing! - Cash - Dividend Cover I don't think there is a lot of worry about zero tariffs for manufactured goods with the EU, although there is some concern that the French will insist on searching every lorry and container that leaves the UK via Folkestone and Dover - there might not be custom duties but that is not all the free movement of goods is about, and the French have form when it comes to being overly bureaucratic. If they insist on checking that every item in a container has the correct labelling the level of duty will not be what kills the export market. However the real worry is about the restriction on selling financial services, where the total tax HM Customs and Excise takes from that part of the sector that deal with the EU (and by tax take I mean not just corporate but also individuals PAYE and VAT) is far larger than the gross amount we pay to the EU. The market in those services is very skewed towards the UK and the other EU countries have much to gain and virtually nothing to lose by playing hardball. We are where we are and I am sure we will make the best of it, but I am not overly sanguine there will be a happy outcome.
gamesinvestor
11 Aug 2016
Re: Amazing! - Cash - Dividend Cover "Anyone who thinks Brexit is not going to seriously affect the housing market substantially over the next couple of years is simply burying their head in the sand."The demise in the UK property market was going to happen irrespective of Brexit, which is the biggest global trade opportunity the UK could experience. As the EU implodes, it's not going to be pretty for anyone, but it has to happen at some point. It's not possible to apply such protectionism as that brought about by the EU which has caused the block to decline at an ever growing rate compared to the rest of the world -- you know the 80% that's not in the EU or a member of the "single market".The quicker the UK walks away from this nonsense the better. Negotiating with the poisonous likes of Juncker and Hollande is a total waste of time.The UK Must stop EU interference on tax-law-fisheries-farming-borders-immigration-human rights.Only then can trade be discussed. Again negotiation on trade will turn out to be a waste of time. The belligerent EU, detached bureaucrats, are never in a rush.However, a statement of how the UK will trade will be enough and it has to be a tough stance. 3-5 months of no deal with the UK outside of the EU will start to tear the German car industry apart and Merkel will be out of a job in no time. Games -- after that the game is probably up - there will be referendums galore and a queue at the exit door.
Eadwig
08 Aug 2016
Re: All hands to the lifeboats HU, "When energy prices explode, this is when you´re going to see the real inflation, artificial manipulations of energy markets are what is keeping inflation low but it cannot last forever. "Nah. No manipulation other than the few percent either way that always goes on. The fact is energy prices aren't going to explode, and oil looks set to drop further if anything. There's more gas in the world than we can possibly use and more being found everyday, literally. Countries with hundreds of years of coal reserves are simply accepting they are never going to use them - USA for example (300 years at a conservative estimate).The UK has got very lucky post Brexit that the oil price has dropped 10% or more, that means inflation will take much longer to take hold than it would otherwise, you're certainly right in that the quickest way to spread inflation through an economy is to put up transportation costs. That then pretty much feeds through to everything, goods and the cost of people getting to work to deliver services.As I hold plenty of oil and gas production stocks, I wouldn't mind seeing energy prices staying well above $50, but Albertan wildfires are finally out, Nigeria is back to full production, Iran is producing more each day ... it aint gonna happen.
Hardcore Uproar
08 Aug 2016
Re: All hands to the lifeboats "and a dangerous game to be playing with the banks who are struggling to earn anything already (all together now - awwww!). "Banks own most of the sovereign debts if governments default then the whole banking system implodes. Banks & central banks are like two drunks propping themselves up at the bar. When energy prices explode, this is when you´re going to see the real inflation, artificial manipulations of energy markets are what is keeping inflation low but it cannot last forever.
Eadwig
08 Aug 2016
Re: All hands to the lifeboats Hardcore, "And it collapsed the pound against the dollar when it was announced."It didn't actually, the move was obviously already priced in to a surprising degree (to me, anyway). And that is including heavy hints about a further cut to probably 0.1% before year end.I think its just playing with symbolism - and a dangerous game to be playing with the banks who are struggling to earn anything already (all together now - awwww!). Good job Carney was at the helm when Brexit came along and had made contingency plans along with other central banks. Even the EU has finally recognised that QE has to be the way to go. All developed economies can't devalue their currencies fast enough, it seems.Will it end in disaster? Probably in some way or other - every cycle does. All we can do as private investors is make as much money as we can meantime and hope it is in a currency that is still worth something when the crisis hits.the way - did you hear about the asteroid that is basically solid gold and will be captured by Earth's gravity as it flies by and end up orbiting us? Around 3 trillion tonnes (not troy ounces), they reckon. I wonder at what point it will no longer be worth while sending up robots to mine it?
Eadwig
08 Aug 2016
Re: Amazing! psmith64, "Lets resume thoughts in 6 months time when the effects of Brexit become more apparent."I think it will become clearer before that. Possibly around October when quarterly data starts coming in that is all post Brexit. Eg. I saw some figures over the weekend which suggested the average house price had dropped slightly from approx £215k to £214k - but, the point was made elsewhere that this tends to be figures from Nationwide and their mortgage lending against specific houses. We all know that a house sale tends to take about 3 months to go through (those solicitors have to justify their fees for a few minutes work). The further point was that the prices included in the figures above may differ down the line if buyers felt they could haggle the price down further or possibly decided to pull out of buying that property - or any other for that matter.Also, November is going to be crucially important for any government intervention. Many infrastructure construction projects are expected to be funded in the public spending review as an economic stimulus. One suggestion is that the government will in some way move to try and build an extra 500k houses, possibly by freeing up previously protected areas amongst other measures. Any such programme will impact the housing market greatly. Anyone holding housebuilder shares will hope that the Tories will design some scheme whereby the private sector will lead such a project ... hard to see how the government could do it otherwise, frankly.psmith64 "I have to be a little more cautious nowadays as I am too close to retirement."A lot of people tend to forget that as individuals we all have different investment goals and horizons and that one of the main factors is age. Eg. The younger you are the more risk you can take because if it all goes belly-up you have your working life to make back any losses and plenty of time to do it in. Not so if you're approaching retirement age and intend to retire - and hopefully by the time you do retire you are more concerned with wealth preservation rather than growth. Personally, I don't envy anyone coming up to retirement right now as annuity rates are dropping by the week. On the other hand, being 15 years away from my state pension (and probably rising further yet) and with the government continually pushing back the age at which I can take my private pension (they never asked me before doing it, but I definitely remember signing a document which said I could take it aged 50 if I wished), I do, in fact, envy anyone who manages to get anything at all out of their retirement plans. Frankly, I don't factor any pension payments whatsoever into my future income, I have no confidence whatsoever that i will collect private or state pensions - even if I manage to live that long ...
Eadwig
08 Aug 2016
Re: Amazing! Glacier Point, "May I respectfully ask if you don't think you are confusing CONSTRUCTION with HOUSEBUILDING here?"I note The Telegraph is now lumping together housebuilders such as TW and companies such as Balfour Beatty.Personally I prefer that to ii's approach of Household Goods and Construction & Materials sectors respectively.LSE have TW as "FTSE sector: Household Goods & Home Construction, FTSE sub-sector: Home Constructionand BBY as FTSE sector: Construction & Materials, FTSE sub-sector: Heavy ConstructionI've always thought that 'Household Goods' nomenclature is very misleading - It has always suggested to me white goods, furnishings and carpets - all of which probably come under some other sector altogether.Some companies are definitely wrongly placed - looking at the Telegraph again, Howden Joinery are classed under Retail, Burberry is classed under Household Goods and Rightmove are listed in the Media sector.This isn't just about pedantry, its actually very important information. Traditionally, stockpickers have always figured around 50% of a stock's price is reliant on sector, but it is even more important on the modern markets. Very large funds often buy and sell by sectors and sub-sectors (they're so big they often can't buy an amount of stock in a specific company which is in anyway significant to their fund and results) and will move every constituent in that sector grouping by doing so. It's another one of those things I'd like to see sorted out better, which that petition that is going about might help P.I.s understand what is included where when a fund buys by sector. Although I think the final date for signing up may have passed now. I always think ii should have the sector showing on the company Summary page too, along with the days sector percentage move. Just one more suggestion I've made over the years which has been ignored - and it isn't like it would take more than a few minutes to add.Perhaps I should start my own ii petition for certain info. that private investors would like to see as standard and see if a few of us can't get some useful changes made. [Hmm, I think I'll start listing suggestions everytime I have to go searching elsewhere for the info I want - maybe I'll get round to doing something about it instead of firing off e-mails or secure messages from time to time. They should pay me for my consultancy really.]
Eadwig
08 Aug 2016
Re: Price targets... 21-07-16 "I'm watching 4 houses that went up for sale in the last week (first ad in local property paper today). One of them seems at least 20% over-priced, but it is in an area where a house rarely stays on the market more than two weeks"27-07-16 "Two of the four have sold already, including the one I thought was massively over-priced. The other two are both next to each other, on a busyish road, on the corner with a side street which leads to a school - I purposely picked these two to watch, they're in a sought after area, but maybe some of the hardest to sell houses."Well, my last update on the York housing sales scene. One of the last two houses went shortly after my last post, so about two weeks. Another one that was over-priced, in my opinion, but again went so fast they obviously got their asking price. Two other houses newly renovated just up from these two have also sold recently, but I'm not sure when they were listed. Two more in the immediate area went up for sale and sold within days of the first local press ad.The house I described right on the corner is still for sale. It always looked odd to me because it had two for sale signs, a local agent with another extra sign tacked to the main one, and purple bricks too. It has been up for sale for over 3 weeks now, so I had a closer look, and the additional sign described it as 6 en-suite bedrooms. I then remembered that it used to be a low-grade hotel or guest house. It has been renovated by the look of it, but is in fact a commercial property (I assume), I can't see anyone buying it other than to use it as a hotel or B&B. I'm quite tempted myself, actually, although I haven't looked at the price...Elsewhere in the area houses have gone up To Let and mostly been let within a couple of weeks. the numbers up for let in the area are much less than there were last year. I don't know why that is, possibly students taking them on for the full length of their degree course, or maybe landlords have new ways to advertise which don't involve traditional estate agent signs outside.Flats are another matter. new builds are being bought up off plan 100% by the time they are within 12 months of completion, as far as I can make out with a little research online, but flats in older buildings, though purpose built, seem to remain For Sale or To Let. There are three only in this area in the one building, so it may be not a good example. Houses which had previously been converted into flats or bedsits have been snapped up, converted back to a single house and sell almost immediately, including one for £850,000 which I knew 25 years ago as a dirty, ill-maintained house full of bed-sitters. I was amazed at the price it brought. Although set far back from the road via a long front garden, the road is extremely busy and the house has no views and only a back yard.The only houses which have been re-listed at lower prices are all well outside of York, I haven't seen one sign of a price being dropped within the city boundaries. There is definitely no sign yet of a drop off in the used or new housing market as yet. It is, of course, only a snapshot of one particular city.
Hardcore Uproar
06 Aug 2016
All hands to the lifeboats Janet Yellen and the Federal Reserve know how bad it is. Why else would they keep interest rates at or near 0% for 8 years? If there were real journalists in the mainstream media they would ask this question of Ol’ Yellen, “Stock markets are at all-time highs, why are you too scared to raise rates 0.25%?”The Bank of England just cut rates by 0.25% and expanded its QE program to 60 billion pounds (including the purchase of corporate bonds). This is a significant move since the last rate cut for the BOE came in 2009. And to combine the cut with quantitative easing is even more significant. It’s not so much a move as a kind of controlled panic. And it collapsed the pound against the dollar when it was announced. Of course, lies surround the rate cut. Governor Mark “The Con” Carney justified the news by explaining the easing was the fault of Brexit!But the economic disaster to come has been thoroughly prepared. Carney wants to blame it on Brexit, of course, because that makes it convenient. He wants to hide the destructive reality of central bank money printing and the global bankruptcy it has helped create. With the divergence between securities and underlying investments worse than at any time in history, it’s hard to express just how bad things are going to get.
JohnyCash
05 Aug 2016
Re: Amazing! - Cash - Dividend Cover Good luck with your purchases FL. I've been doing the same since they bottomed out post Brexit, as have the Directors of the Company. We therefore have the prospect of capital growth and fantastic dividends - the special dividend for 2017 is already in the bag. Demand for housing is still outstripping supply and will do so for several years yet, and the recent reduction in interest rates can only help. Ignore the de-rampers who are trying to talk the price down for their own selfish interests.JC
