libspero

Regarding home builders specifically, there are two things I see poised to distort the share/asset price correlation. First is the governments pushing of shared ownership. Every young couple who can't afford a new house but feel they have to get on the ladder at any cost are being guided towards shared ownership. These schemes generally run through the builders with government support, so essentially there will be a bias towards young buyers purchasing exclusively from builders rather than the wider market. Distortion No 2. There is a lot of talk about the UK government relaxing planning regulations in order that more homes be built. I'm presently undecided about the outcome of this action on builders shares, but I imagine large scale building decisions could only be good for them.. even if more building leads to lower asset prices.