Surge In Housebuilder Shares

[blankster]

Anyone got any idea what caused the surge in the housebuilder shares over the last few days?

People in the property sector seem to be pretty upbeat about the future all of a sudden.

[Misanthrope]

Anyone got any idea what caused the surge in the housebuilder shares over the last few days?

People in the property sector seem to be pretty upbeat about the future all of a sudden.

Largely just 'trading' off the lows. Somewhat bullied along by talk of the London commercial building sector picking up a bit. Flash in the pan.

[Realistbear]

Anyone got any idea what caused the surge in the housebuilder shares over the last few days?

People in the property sector seem to be pretty upbeat about the future all of a sudden.

We have weathered the storm better than our fellow travelers in massive HPI. I think we may have seen the best days of the "crash" and the market will return to growth, perhaps by the 3rd Q 2011.

We have full employment relative to others, our bonds are AAA+ meaning we can keep IR low, our industry is picking up strongly and BTL is thriving thanks to high demand and low supply. The market no longer needs the bottom feeders as the new landlord class has filled the gap in the market. I have watched cheap houses sell here in days only to find a TO LET sign out front. And To Lets go within days also.

I have basically given up on the UK property market as we are reverting to our long term trend of a nation divided between a few haves and a lot of have nots. Emigration is the best option as houses are cheap in the US, Spain, going down in Portugal, getting cheaper in Canada and possibly going to get cheap in OZ. But not here--maybe 10-12% down this year and another 10% next year but that will not be enough .

[guitarman001]

I bought a lot a while ago but they just kept going DOOOOWN. Sold the at a loss. Now they're going UUUP for little reason IMO. I'm staying OUT until fundamentals look good. AG is correct in his description.

[Fawkandles]

These share prices are a reflection of investor's expectations of the future profitability of builders, NOT current house price trends. These shares have already had their crash.

I traded them (BDEV) at 100p ish, thinking that was the bottom. I was wrong. Still scared to go back in the water.

[Democorruptcy]

Realisation that the FSA are never going to actually do anything about restricting mortgages and the housing minister sounding like someone who wants the credit taps turning back on?

[Realistbear]

Realisation that the FSA are never going to actually do anything about restricting mortgages and the housing minister sounding like someone who wants the credit taps turning back on?

And no sign of letting no-pays and late-pays lose their houses as government subsidies look more or less long term.

The government and banksters are fighting a HPC as Churchill fought Jerry--they will Nevah give in!

[Realistbear]

As I was saying in my last post:

http://www.bloomberg.com/news/2010-12-08/cameron-to-ask-u-k-banks-to-lend-more-to-military-personnel.html

Cameron to Ask U.K. Banks to Expand Loans, Mortgages to Military Personnel

By Gonzalo Vina - Dec 8, 2010 12:01 AM GMT

Prime Minister David Cameron will ask banks to look at ways of improving access to mortgages and loans for British military personnel in an effort to increase home ownership among members of the armed forces.

Theres a war on you know. And the enemy is the HPC.

[MrFlibble]

We have weathered the storm better than our fellow travelers in massive HPI. I think we may have seen the best days of the "crash" and the market will return to growth, perhaps by the 3rd Q 2011.

We have full employment relative to others, our bonds are AAA+ meaning we can keep IR low, our industry is picking up strongly and BTL is thriving thanks to high demand and low supply. The market no longer needs the bottom feeders as the new landlord class has filled the gap in the market. I have watched cheap houses sell here in days only to find a TO LET sign out front. And To Lets go within days also.

I have basically given up on the UK property market as we are reverting to our long term trend of a nation divided between a few haves and a lot of have nots. Emigration is the best option as houses are cheap in the US, Spain, going down in Portugal, getting cheaper in Canada and possibly going to get cheap in OZ. But not here--maybe 10-12% down this year and another 10% next year but that will not be enough .

I fear you are on the money. For some odd reason we love paying over the odds for virtually everything; cars, houses, food, energy, and we are fully prepared to swamp ourselves in debt to achieve theis. I'll admit I cannot compete with most of my fellow Englishmen, not because I don't have the money, simple because I don't like paying over the odds for anything.

The UK is like eBay, idiots bidding second hand crap over the new retail price. Actually a question; is eBay infested with the same biddiots world over or is it just in the UK? Just curious.

[Realistbear]

I fear you are on the money. For some odd reason we love paying over the odds for virtually everything; cars, houses, food, energy, and we are fully prepared to swamp ourselves in debt to achieve theis. I'll admit I cannot compete with most of my fellow Englishmen, not because I don't have the money, simple because I don't like paying over the odds for anything.

The UK is like eBay, idiots bidding second hand crap over the new retail price. Actually a question; is eBay infested with the same biddiots world over or is it just in the UK? Just curious.

I used to trade heavily on eBay to make a crust while between jobs in the US. I found people would sometimes overbid there but no too much.

For us, eBay is a dream to make money when all you are doing is raising mars bar cash. Its an outlet for frustrated poor people--like our car boot sales. Look at TV programming--cash in the attic. Always the HOPE of something better that never comes. Why so many bookies in the High Street? Obsession with the Lottery. Keep the masses in hope while the new ruling elite who own the property milk them for every penny.

My parents emigrated to the US in the 60's due to all the same frustrations that are re-emerging now.

[Pent Up]

We have weathered the storm better than our fellow travelers in massive HPI. I think we may have seen the best days of the "crash" and the market will return to growth, perhaps by the 3rd Q 2011.

We have full employment relative to others, our bonds are AAA+ meaning we can keep IR low, our industry is picking up strongly and BTL is thriving thanks to high demand and low supply. The market no longer needs the bottom feeders as the new landlord class has filled the gap in the market. I have watched cheap houses sell here in days only to find a TO LET sign out front. And To Lets go within days also.

I have basically given up on the UK property market as we are reverting to our long term trend of a nation divided between a few haves and a lot of have nots. Emigration is the best option as houses are cheap in the US, Spain, going down in Portugal, getting cheaper in Canada and possibly going to get cheap in OZ. But not here--maybe 10-12% down this year and another 10% next year but that will not be enough .

I'm surprised your giving up RB. I thought prices were dropping 5 - 10% per month where you are?

[Pole]

I'm surprised your giving up RB. I thought prices were dropping 5 - 10% per month where you are?

the last bear turning bull, and all that...

[Realistbear]

I'm surprised your giving up RB. I thought prices were dropping 5 - 10% per month where you are?

I am tracking a few houses in my post code and see 10-12% down since Spring. We might see another 5-10% next year. But so what? That makes a hideously overpriced pile of shit that peaked at £350k down to £280k or so. We would need an overall drop of 60-70% to bring value to our market--earnings related that is.

[Pent Up]

I am tracking a few houses in my post code and see 10-12% down since Spring. We might see another 5-10% next year. But so what? That makes a hideously overpriced pile of shit that peaked at £350k down to £280k or so. We would need an overall drop of 60-70% to bring value to our market--earnings related that is.

While 60 -70% is what would bring value it is totally unrealistic. I think we will see around 20% down from the 2010 peaks. Average of about £125k and I'll be happy with that.

[MrFlibble]

While 60 -70% is what would bring value it is totally unrealistic. I think we will see around 20% down from the 2010 peaks. Average of about £125k and I'll be happy with that.

That's an interesting comment, 60-70% falls are unrealistic but yet 60-70% rises have already been seen.

It should work both ways (is doing so in the US, Ireland, NI, Spain, etc.), but it would appear the UK is different - not in a good way for us lot.

Something will have to give before much longer, wages are not rising, property is still stupidly priced and living costs are going up like there is no tomorrow.

[MrFlibble]

I used to trade heavily on eBay to make a crust while between jobs in the US. I found people would sometimes overbid there but no too much.

For us, eBay is a dream to make money when all you are doing is raising mars bar cash. Its an outlet for frustrated poor people--like our car boot sales. Look at TV programming--cash in the attic. Always the HOPE of something better that never comes. Why so many bookies in the High Street? Obsession with the Lottery. Keep the masses in hope while the new ruling elite who own the property milk them for every penny.

Hope, it is the quintessential human delusion, simultaneously the source of your greatest strength, and your greatest weakness.

Sadly hope is all we have left in the UK :angry:

My parents emigrated to the US in the 60's due to all the same frustrations that are re-emerging now.

I'm expecting you to throw in the towel and head back to the US before much longer. Although the US has big problems when you put it toe to toe with the UK there is simply no competition. If I could get a green card I'd be buying a one way ticket this afternoon.

[The Masked Tulip]

Grass is always greener... I know numerous Yanks wanting to get out of the US and come live here. I know people here looking to go to Oz and NZ.

[MrFlibble]

Grass is always greener... I know numerous Yanks wanting to get out of the US and come live here. I know people here looking to go to Oz and NZ.

This is exactly why we need to operate an exchange based system for migration instead of having a cap. There are skilled people who cannot get into the UK from the US and there are skilled people who cannot get into the US from the UK. It would make much more sense for these people to pair up and trade places.

I for one would be a lot happier and more productive in the US, just as I'm sure an American would be a lot happier and more productive in the UK, so why can we not simply trade places?

[catsick]

So on the 23rd nov I posted the below on why the shares were quite bombed out and my thoughts then , two weeks later with PSN at 4.14 its all looking quite sweet ...

Posted 23 November 2010 - 03:41 PM

So I did a bit of delving around this morning and read up on the persimmon accounts and bought some shares at what seemed a fair price of 3.42

I owned these shares from 2003 - 2005 and made some money before so I am risking the profit I made

Delving through the companies accounts is quite interesting, they have managed to use the past two years pulling themselves back from the brink and now basically have no net debt and a land bank of around 60k properties they can build in the future if they choose to over say 5 years, they have ample bank lines to do what they want but are being conservative.

The cost to them of building an average 1000 sqft house is about 100k , plus 30k for the land and 10k sales cost and 10k admin and 10k profit , and the house sells at 160k down from close to 200k , they highlight the fact that building costs have dropped a lot which seems in line with the close to MNW comments

Housing starts have collapsed, so 60k houses a year are being built , just net immigration is 200k a year and there is a lot of pent up 40 year old ftb , the only thing in the eqaution that can be squeezed now is the 30k plot cost and I dont see that with all the hoops with the councils they have to jump thru that anyone will or can provide a plot with planning for less than say 10k , so with builders wages down close to mnw the lowest the average price can go is 140k say , and below that you will have zero housing starts and still the immigration floodgates open wide ...

I cant see how there is not demand for their product either now or in a few more years of open floodgates, going from their numbers it seems that houses cannot be built now for prices 30% lower than where we are now , so we get a crash and zero construction or bounce along the bottom and they will be fine .......

[sign_of_the_times]

As I was saying in my last post:

http://www.bloomberg.com/news/2010-12-08/cameron-to-ask-u-k-banks-to-lend-more-to-military-personnel.html

Cameron to Ask U.K. Banks to Expand Loans, Mortgages to Military Personnel

By Gonzalo Vina - Dec 8, 2010 12:01 AM GMT

Prime Minister David Cameron will ask banks to look at ways of improving access to mortgages and loans for British military personnel in an effort to increase home ownership among members of the armed forces.

Theres a war on you know. And the enemy is the HPC.

I thought squaddies were given on-site accommodation, why do they need mortgages?

[frenchy]

I have basically given up on the UK property market as we are reverting to our long term trend of a nation divided between a few haves and a lot of have nots. Emigration is the best option as houses are cheap in the US, Spain, going down in Portugal, getting cheaper in Canada and possibly going to get cheap in OZ. But not here--maybe 10-12% down this year and another 10% next year but that will not be enough .

What exactly would be enough? 12% + 10% = 23%, on top of about 15% last year. You need to get real, you will not get more than this and should not expect more than this anyway. I believe you are stuck in the late 90s. You will not get a house at 1995 or 2000 price and if you are hoping to you are deluded. There is a thing called inflation, whether you like it or not, that affects everything. If you strip speculation out of HPI you still have inflation, that is the system we live in, in the UK and everywhere else. Do the maths, use whatever yearly inflation figure you want, compound it for 10 or 15 years and you will see that if we get another 20-25% HPC that will be good enough.

Lets say 10years @ 4% is +50%, 15years @ 5% is +210%, that is the minimum you will get, it applies to everything, including cars. Around my way, a typical 4bed detached sold in 1999 for 110k, selling not long ago for 300k now go for 250-260k. Another 20% and you would be down to 190-200k, 11years @5%, what is your problem? You thought you would get it for 150k? why? Can you get a car in 2010 for the same price as the same car back in 1999, or even only 50% more? You need to get real and review your expectations.

Another way of looking at it is yield, the typical 4 bed detached I am on about (in Bristol) rents for 1000-1200GBP, lets say 1100GBP. @ 300k it is 4.4%, overpriced / @250k it is 5.3%, marginal / @200k it is 6.6%, pretty good if you ask me.

Please tell me, what are you expecting, I am genuinely intrigued...

[frenchy]

That's an interesting comment, 60-70% falls are unrealistic but yet 60-70% rises have already been seen.

It should work both ways (is doing so in the US, Ireland, NI, Spain, etc.), but it would appear the UK is different - not in a good way for us lot.

Something will have to give before much longer, wages are not rising, property is still stupidly priced and living costs are going up like there is no tomorrow.

maths again.

If by 70% fall you mean 70% of current prices, on a 200k house it takes you to 60k. To go back up to 200k you will need a 330% rise...

Now if you mean 70% of the current price it is a 30% fall, 200k becomes 140k and it is a 30% fall than will require a 43% rise to go back up to 200k.

A 70% rise is NOT met by a 70% fall.

[nice tuna sandwich]

So on the 23rd nov I posted the below on why the shares were quite bombed out and my thoughts then , two weeks later with PSN at 4.14 its all looking quite sweet ...

Posted 23 November 2010 - 03:41 PM

So I did a bit of delving around this morning and read up on the persimmon accounts and bought some shares at what seemed a fair price of 3.42

I owned these shares from 2003 - 2005 and made some money before so I am risking the profit I made

Delving through the companies accounts is quite interesting, they have managed to use the past two years pulling themselves back from the brink and now basically have no net debt and a land bank of around 60k properties they can build in the future if they choose to over say 5 years, they have ample bank lines to do what they want but are being conservative.

The cost to them of building an average 1000 sqft house is about 100k , plus 30k for the land and 10k sales cost and 10k admin and 10k profit , and the house sells at 160k down from close to 200k , they highlight the fact that building costs have dropped a lot which seems in line with the close to MNW comments

Housing starts have collapsed, so 60k houses a year are being built , just net immigration is 200k a year and there is a lot of pent up 40 year old ftb , the only thing in the eqaution that can be squeezed now is the 30k plot cost and I dont see that with all the hoops with the councils they have to jump thru that anyone will or can provide a plot with planning for less than say 10k , so with builders wages down close to mnw the lowest the average price can go is 140k say , and below that you will have zero housing starts and still the immigration floodgates open wide ...

I cant see how there is not demand for their product either now or in a few more years of open floodgates, going from their numbers it seems that houses cannot be built now for prices 30% lower than where we are now , so we get a crash and zero construction or bounce along the bottom and they will be fine .......

Nice work! I think Persimmon is best of the bunch of builders for the reasons you describe, have missed this trip but will be waiting for the next opportunity.

[Realistbear]

I thought squaddies were given on-site accommodation, why do they need mortgages?

To increase demand for pwoperty and thus help out with HPI. A few extra thousand on the property ladder would be "every little helps" thinking by someone in DC's cabinet who had to come up with an idea to stop house prices falling.

[Realistbear]

This is exactly why we need to operate an exchange based system for migration instead of having a cap. There are skilled people who cannot get into the UK from the US and there are skilled people who cannot get into the US from the UK. It would make much more sense for these people to pair up and trade places.

I for one would be a lot happier and more productive in the US, just as I'm sure an American would be a lot happier and more productive in the UK, so why can we not simply trade places?

Unless you are retired I would think twice about the US. They work you to death there and you get 2 weeks holiday after your first year and maybe 4 weeks if you live to the 10 years of service point.

I am only considering the US again because I feel forced out here. Too many go to OZ and get majorly depressed by the brutish culture there. Beach and barbies--how long will that last? As for Canada--it s bit woodsie most places and Vancouver is as expensive as here--well maybe NOT that expensive but close. NZ? Who knows--too cut off from F & F IMO. Spain is a decent option if you can live the ex-pat thing--cocktail hour that starts at 7 and works its way down to 3 pm after a year or so.

Edited December 8, 2010 by Realistbear