View more on these topics

Housebuilders “unfazed” by Brexit as demand holds strong

House-Building-Construction-700.jpgPersimmon, Taylor Wimpey and Barratt Developments have all claimed that demand for houses remains strong as they posted results last week.

The Share Centre currently recommends all three companies as a ‘hold’ and advises investors to remain vigilant as the Brexit story continues to unfold.

Investment research analyst Helal Miah says: “Persimmon was the first of the housebuilders to update the market last week, in which it stated that demand for houses has actually increased since the EU referendum last June with the forward sales book up 12 per cent on this point last year to £1.23bn. The group’s confidence was underlined by news that it has acquired a further 18,700 plots and opened 255 new development sites during the year.

“This positive trend continued into this week, in regards to Taylor Wimpey’s statement at least. The company, which is one of the biggest house builders in the country, noted that it was ‘unfazed’ by post-referendum uncertainty in the market, predicting that its profits will be at the higher end of analysts’ expectations. The average selling price of homes increased by 13 per cent to £286,000, and it ended the year in a strong position with more cash than last year, even after paying dividends.

Miah continues: “Barratt Developments was also keen to highlight that overall market conditions were healthy with strong demand for new homes, indeed total forward sales were up 15.8 per cent. However, the group’s heavy reliance on the London property market has presented some headwinds, in particular in regards to its full year targets with the group subsequently airing a cloud of concern.

“Despite the worthy forward looking prospects, good consumer confidence, mortgage availability and ongoing government support, there remains an air of uncertainty around the housebuilders.

He adds: “Investors interested in the sector will undoubtedly be more than aware that these companies suffered in the immediate aftermath of the Brexit vote back in June, and this led to the sector as a whole becoming more cautious. Indeed, the unknown impact from the Brexit negotiations will continue at least through 2017 and likely until the United Kingdom leaves the European Union, and this timeframe is uncertain.

“We would advise investors interested in the sector to keep their wits about them. Although housebuilders are still acquiring land banks and plots, companies as well as analysts remain vigilant, especially those with more of a London focus such as Barratt Developments.”



Advisers call for standalone equity release qualification

More than 60 per cent of Society of Mortgage Professionals and Personal Finance Society members support the idea of a standalone equity release qualification to enable pensions and investment advisers to sell the products without having to be fully-qualified mortgage advisers. Currently advisers must be mortgage-qualified up to level three in order to advise on equity release. […]


Foundation Home Loans to begin residential lending in 2017

Buy-to-let specialist lender Foundation Home Loans will begin residential lending this year, according to new director of marketing Jeff Knight. Knight, who joined Foundation last week. says Foundation will start small with its residential lending. He says: “At some point this year we will be implementing a simple residential proposition. For the forseeable future, buy-to-let […]


Santander to pay retention proc fees from March

Santander for Intermediaries has today announced plans to pay mortgage brokers a procuration fee of 0.2 per cent on retention business. The roll-out of payments across networks and mortgage clubs will start from March 1 and be fully in place by the start of July. Procuration fee payments will be paid on all retention business […]

India budget: BJP focuses on growth

By Kunal Desai, Head of Indian Equities

With markets kept open on Saturday, finance minister Arun Jaitley delivered a promising budget focused on growth and decentralisation. While many complained about a six-day working week, there was much to be pleased about and the markets rallied in the afternoon to finish in the green.


Neptune video: Abenomics: the impetus for Japan’s fast-track recovery?

The remarkable performance of the TOPIX over the past year has caused many sceptical equity investors to look again at the Japanese market. These returns have come despite very significant problems facing the Japanese economy. Chris Taylor, manager of the Neptune Japan Opportunities Fund, discusses these problems and whether Abenomics will be able to overcome them, enabling the market to continue to rise.

In the video, Taylor addresses the following:

• The size and speed of Japan’s unprecedented monetary policy
• Abenomics and the implications should it fail
• Corporate Japan and beneficiaries of government policy


News and expert analysis straight to your inbox

Sign up