Another U.K. builder worth owning is Berkeley Group. Many years ago I worked for a corporate finance firm in London and Berkeley were a client. I have owned it in the past was was too dumb to hold it. It came to mind in the last year as the higher interest rates and grim U.K. property market has hit the headlines. Seeing Berkshire pick up some US builders recently has fuelled my interest further.

I am in no position to buy yet having done almost no research lately on it. But I remember they were known to have the following characteristics.

Extremely well run. Shrewd housing market timing. Shareholder friendly with a strong bias for making money when the going is good and then returning it to shareholders aggressively when they think it's time to scale back. Buy backs and major dividends payouts.

From a very quick glance at their latest financial statements, they are not as cheap on a price to book as competitors. PE is around 10, which is not so cheap if the cycle is about to take a noise dive.

The U.K. stock market really is in the doldrums and has been for a long time now. FTSE100 is only a fraction higher than it was in 1999. Commentators have almost written off the U.K. Brexit has put a spanner in free trade. The Scottish and the Northern Irish want to leave, or at least large sections of their countries do. No big tech to speak of. Labour government set up to take charge in a few years. Might not be capitalist friendly. Neighbours Ireland are booming and making U.K. look bad. Large section of houses with short term fixed rates in a rising interest rate environment. Budget deficit making life hard for government. So lots to worry about.

Big positives are respected institutions and rule of law.

Berkeley Group operates exclusively in the rich south of the country and specialises in brown field development. And are very good at it.

Long term U.K. needs more property to house it growing population. Immigration also a sign that it's not that bad in the U.K.

U.K. planning laws prevent the level of building required due to - a not in my backyard policy. Berkeley Homes with it brown field strategy is perfectly placed long term.

I will be keeping an eye on the valuation if the housing market get tougher and it get cheaper temporarily.

London is still an important place for the global rich to keep assets.

I would get very interested in b

Berkshire Hathaway FAQ

---

Contact Shrewd'm
Contact the developer of these message boards.