2015 Chart Toppers? The House Builders

Whilst they may not be earning many plaudits in terms of helping to solve the widely perceived problems of low housing supply and poor affordability, the house builders have been among the best performers on the stock market this year.    Here’s Kyle Caldwell from the Daily Telegraph’s take on it.

Top of the charts is housebuilder Taylor Wimpey. Its share price has risen 46pc so far in 2015. Two of its peers, Barratt Developments (up 32pc) and Persimmon (up 24pc) also make the top ten. Housebuilders’ shares have rocketed over the past five years, benefiting from favourable government policies, record low interest rates and cheap mortgages. Fund managers who have profited remain positive and are not rushing to bag profits. Julian Chillingworth, chief investment officer at Rathbones, the fund group, said: “The housebuilders are in strong financial positions and have plenty of cash. The yields are attractive and I expect some one-off payments – special dividends – also to be paid from time to time.”

Direct government subsidies to buyers, highly regulated supply, limited capacity to increase supply, a falling contribution to the community through affordable housing, low interest rates…it’s never going to happen but there’s a case for a windfall tax instead of windfall special dividend payments to shareholders.  Housebuilding is not exactly an industry that’s been creating innovative new products.  However, the benefits of current govt. support and regulation seem to be going to investors and senior managers.  I don’t really see what the latter have done to earn some the eye-watering incentive payments that are coming their way.


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