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Builders Shares Getting Hammered Today

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http://www.google.com/hostednews/ukpress/article/ALeqM5ijPhoVDGpid4wHwSFR_1u_n85JUw?docId=N0071621289814190853A

Chief executive Mike Farley said banks needed to lend more and ask for smaller deposits. He called for banks to return to lending 95% of the value of the property, rather than asking borrowers to stump up 25% deposits.

"The crucial thing is the lack of mortgages, that's what's holding the market back" he said. "People can find 5% deposits without too much problem, but when you are asking them to find £40,000 or £50,000 that's a bit daunting."

The actual trading update is pretty unspectacular, and the comments seem desperate. I suppose it's for the shareholders.

Return to normal 2007 still years off then!

Edited by Ash4781

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Builders have been getting hammered for a good month. I think it was the Halifax -3.6% that started it. BDEVare down well over 30% from a few months back.

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Builders have been getting hammered for a good month. I think it was the Halifax -3.6% that started it. BDEVare down well over 30% from a few months back.

looking at the chart they have been falling for a year now

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looking at the chart they have been falling for a year now

You know I think these builders shares might be leading index for the property market.

This idea is my intellectual property, and I reserve the right to the content pertaining to it.

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But still a long way above the 2008 lows - which were probably based upon a more accurate perception of the value of their land bank and future sales.

What were the 2008 lows and do you think we will see them soon

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You have to give it to Bubb that he does appear to have been right about BDEV being a good indicator not just of house prices but of where the economy is going.

I don't mind admitting that I ignored many of his BDEV posts - simply because I was not interested in such things - but once I took the time to read them I ended up following BDEV, and to a lesser part TW, for the past 6 months. It has been fascinating watching BDEV as they have drifted down and, in the past month since the 3.6% Halifax down figures came out, gone down a fair bit.

So hats off to Bubb for that.

From what I have been reading the problem for the likes of BDEV and TW appears to be that as their share price fall the cost of servicing their debt becomes more expensive and at the same, because the housing market will be getting worse, then the value of their land banks will fall. I have read online the possibility of their land banks halving in value.

I don't mind saying that if I don't get my daily fix of BDEV and TW on Google finance then I am a misery.

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Hope one of the big house builders goes under.

I'm a bricklayer and was viewing a forum i go on about the trade, someone from the north east posted a thread today commenting on the prices that Persimmon are paying, shocking. It's not far off minimum wage.

It seems with the low volume of their sales they are trying to maximise their profits by squeezing the tradesmen. But they are still charging the house buyer top prices.

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Hope one of the big house builders goes under.

I'm a bricklayer and was viewing a forum i go on about the trade, someone from the north east posted a thread today commenting on the prices that Persimmon are paying, shocking. It's not far off minimum wage.

It seems with the low volume of their sales they are trying to maximise their profits by squeezing the tradesmen. But they are still charging the house buyer top prices.

If you post the name of the forum I am sure one of us could cross-post with mumsnet and then we could perhaps observe one of the most surreal threads on the worldwide web.

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Hope one of the big house builders goes under.

I'm a bricklayer and was viewing a forum i go on about the trade, someone from the north east posted a thread today commenting on the prices that Persimmon are paying, shocking. It's not far off minimum wage.

It seems with the low volume of their sales they are trying to maximise their profits by squeezing the tradesmen. But they are still charging the house buyer top prices.

The builders have to charge house buyers top prices because they need the money to pay their executives their massive salaries. If they didn't those executives might leave.

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You have to give it to Bubb that he does appear to have been right about BDEV being a good indicator not just of house prices but of where the economy is going.

Kind of obvious though, isn't it?

I don't mind admitting that I ignored many of his BDEV posts - simply because I was not interested in such things - but once I took the time to read them I ended up following BDEV, and to a lesser part TW, for the past 6 months. It has been fascinating watching BDEV as they have drifted down and, in the past month since the 3.6% Halifax down figures came out, gone down a fair bit.

The point is that he thought it was a leading indicator, when - as far as I can tell - it lags the other indicators. So it drops on rightmove falls, Halifax falls etc..

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Kind of obvious though, isn't it?

The point is that he thought it was a leading indicator, when - as far as I can tell - it lags the other indicators. So it drops on rightmove falls, Halifax falls etc..

But BDEV has been going down for nearly a year whilst house prices were going up. BDEV had its bounce earlier than house prices in 09 and started its downward trend before house prices did. So it led them.

All builders shares were spooked by the halifax large fall - the market started feeding on itself - but if you look at the last 12 months the shares have been falling for most of it; I don't understand how you can say that it has lagged if you just looked at the last 12 months as oppesed to the last 3.

Edited by MinceBalls

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http://www.google.com/hostednews/ukpress/article/ALeqM5ijPhoVDGpid4wHwSFR_1u_n85JUw?docId=N0071621289814190853A

Chief executive Mike Farley said banks needed to lend more and ask for smaller deposits. He called for banks to return to lending 95% of the value of the property, rather than asking borrowers to stump up 25% deposits.

"The crucial thing is the lack of mortgages, that's what's holding the market back" he said. "People can find 5% deposits without too much problem, but when you are asking them to find £40,000 or £50,000 that's a bit daunting."

The actual trading update is pretty unspectacular, and the comments seem desperate. I suppose it's for the shareholders.

Return to normal 2007 still years off then!

When a 25% deposit is £15,000 rather than £40,000 or £50,000 everything will be fine.

Once again, lower house prices are the solution rather than increased leverage for everyone apart from downsizers and developers sitting on large land banks and inventories of unsold houses.

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These people are the very ones that have made it increasingly hard for first time buyers to get started.

Don't hate the players..hate the game.

Why do you think people get into BTL ? Do you think they want to mess around with tenants, voids, damages etc.

No, they just want somewhere to invest, and previous governments have done everything in their power to make it pointless to get into pensions, and tax you whenever you make a penny.

So either make it difficult to BTL, or provide better places to invest.

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Don't hate the players..hate the game.

I hate the game AND the players.

Buy-to-let landlords led the charge for people owning more than one or two properties. This in turn helped escalate prices when salaries were relatively static. BTL helped push the prices for property above what first time buyers should / could afford.

Defending Buy-to-let landlords isnt my thing.

Maybe you can do it, I can't.

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I got a small foothold in BDEV at 83 p thinking they couldn't fall too much lower. How wrong was I..... AGM tomorrow - hoping the price price picks up so I can sell and get out..... making a loss of only £60 so not too bad, but still...

Other thought is to just hold, long-term... even if it takes years. If the company doesn't fold I'm hoping the price will at least double within 5 years.

Edited by guitarman001

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Last time they were 50p did you buy some?

No, wish I had. At the time I was locked into the end of the World scenario that many of us had convinced ourselves was about to happen. If you had bought then and got out within 12 months you would have done very nicely indeed.

I think there is a difference now - the housing market actually beginning to tank. But I am keeping an eye on BDEV and TW.

TW have just begun building on a prime site near me and there is no shortage of people wanting to buy the houses. The housing frenzy beast is not yet dead.

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