Barratt Developments share price may be down slightly today, but that is probably more due to the general market being down and the fact that in recent days it went up on the back of other good trading updates from listed UK construction companies, than any bad sentiment towards the company. The share has had an amazingly good run the last 18 months or so, like others in the sector defying bear calls that it is overvalued.
That run looks set to continue as Barratt follows others by confirming that the Government's Help to Buy scheme is playing its part.
Mark Clare, Group Chief Executive commented,http://www.digitallook.com/news/rns/21017935-10120/BDEV-Trading_Statement_html?ac=,&username=,
"As more house buyers return to the market, supported by improved mortgage availability and the Help to Buy scheme, we are in a strong position to continue to grow the value of the business. We are increasing our investment in land whilst reducing debt and have delivered a performance ahead of expectations. Momentum is continuing to build and with forward sales up substantially, we are confident we can improve our performance still further in the year ahead."
While valuations of UK house builders are already stretched and there is a lot of good news already baked into their share price cake, don't be surprised if we seeing the still early stages of a bubble in prices for these companies.
More posts on house prices and house builders below:
Help to Buy, the new housing benefit
Bovis Homes update
Taylor Wimpey benefits from Help to Buy
Persimmon reports
Telford Homes update
UK house prices, case of too big to fail.
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