Britain's house builders have been riding the wave of another boom. Low interest rates and huge amounts of government support, such as the Help-to-Buy scheme have been kind to them over the last couple of years. But now the housing market is starting to cool.
Last week, Bellway (LSE: BWY)said that conditions were returning to more normal patterns. The company is doing well, with reservations slightly ahead of this time last year, and it's set for another good year of increased profits.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Its share price is at similarly lofty levels. At 1,837p,it trades on nearly 1.7 times net asset value, which is very expensive compared to the past 20 years.
Profits could stay high for a while yet given that Bellway has been buying land at good prices. But one day, the housing market will head south again Bellway's shares don't reflect that risk.
Verdict: take profits
-
Review: The Hut, Colwell Bay – a seafood lunch with a holiday feelTravel Getting to The Hut in Colwell Bay on the Isle of Wight is almost as rewarding as actually eating there
-
What is the 7 year inheritance tax rule and how does it help cut your bill?Speculation is rife chancellor Rachel Reeves has plans to target inheritance tax once again in her upcoming Budget. But the 7 year inheritance tax rule can save you thousands - here’s how it works.
-
Despite cooling UK house prices, builders are charging aheadTips The rate of UK house price growth is slowing. But demand for new houses remains high, and housebuilders are firing on all cylinders. Rupert Hargreaves picks the best stocks in the sector.
-
If only you’d invested in: BellwayFeatures Bellway is a major house builder in the UK. Over the year to July the firm’s pre-tax profits rose 12.6% to £561m while revenues were up around 14% to £2.6bn.
-
Should you buy housebuilders?Features House builders have seen their shares hammered since the Brexit vote. Is there further to fall – or is this a buying opportunity? Sarah Moore investigates.
-
Company of the week: BellwayFeatures Housebuilder Bellway is in rude health, says Phil Oakley. But are the shares still a buy?
