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Barratt Developments And Taylor Wimpey Join Ftse 100

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Two of Britain's biggest housebuilders will re-enter the FTSE 100 later this month following the latest reshuffle of the blue-chip index.

Barratt Developments and Taylor Wimpey will replace two stocks hit by the recent sell-off in commodities.

The companies' shares have gained 30% and 20% respectively this year on the back of Britain's rising property market.

The London Stock Exchange said Petrofac and IMI would join the FTSE 250.

The changes will take effect from the start of trading on December 22.

The BBC article does point out that the shares plunged in the economic downturn and then have risen resulting in (it's early morning so this might be incorrect) to market cap's of around the comparable 2007 entities.

Input cost inflation, and labour cost inflation for the sector I assume are low so that's good for margins. Then on the demand side I think it's clear the gov' will be bringing on more support measures in the future as the OBR needs to hit both the house price inflation and transaction volume to hit Stamp duty land tax and inheritance tax targets.

The BOE can also help by driving down mortgage rates. I think that might feed through to get the RPI into a deflation -x.x% reading. It's not an official National statistic? Though I'm not sure how low they would need to go with mortgage rates to achieve the required increase in volume. Limited by those with viable deposits, secure decent jobs, and MMR (there is some pension reform due to free up). There's lots of competition in lending. I'm not sure for example where that would leave the smaller building societies. They'd have to merge or something.

I'm not sure if Osb' is planning on getting those with the pension reforms to leverage up (if possible in MMR rules). Seems a bit nuts for a strategy but I guess it would be alright while it worked and then some almighty calamity. Maybe the golden age of renting is approaching - 1% rental yields?

This is not advice. It's a rant!

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