The UK PIN Fund (our fictional Fund consisting of property-related companies that are listed on the London Stock Exchange) rebounded substantially during the first quarter of this year, returning 9.3% in Q1.

Thanks to substantial dividend payments since the funds creation, our Fund would have earned an investor an annual ROI (return on investment) of 11.1% per year over the past 8.5 years, compared to just 1.4% for the FTSE 100 Index (see table below).

However, the big story in Q1 was the rebounding share prices of the UK housebuilders. The average increase for the five housebuilders in our Fund was 11.8% in the first quarter. Much of the optimism in the sector came from the Bank of England (BoE) which gave a markedly more positive outlook for the UK economy in February, compared to December last year.

The BoE predicted that inflation had probably peaked in the UK, and in other advanced economies, and that the forthcoming recession would be shallower than previously expected, while acknowledging that inflation remains high.

The Bellway share price increased by 12% in Q1 and on 28 March the company announced its results for the half year ending 31 January 2023, which included a £100m share buyback. Revenue rose by 1.6% to £1,809m (2022 – £1,780m), which was a half year record level for the Group.

There was strong volume output, with the completion of 5,695 homes (2022 – 5,694 homes), and a 1.6% increase in the average selling price to £316,929 (2022 –  £311,849). However, the reservation rate reduced by 32% to 138 per week (2022 – 202), with weaker private demand partially offset by the Group’s programme of accelerating the construction of social homes.