The UK PIN Fund (our fictional fund of 10 property-related listed companies) returned 11.4% in the third quarter of this year, largely due to a strong performance from our five housebuilders, which returned 14%
on average.

Data provider S&P Global reported in September that UK residential construction work ‘gained momentum’ in August, with growth accelerating to its fastest rate since September 2022. This increase in housebuilding was due to ‘improving market conditions’ and lower borrowing costs, S&P Global said.

Borrowing costs jumped after the September 2022 minibudget, driving up mortgage rates and making it harder for buyers to get a home loan, but mortgage rates have been dropping this summer, and most analysts in the City anticipate another interest rate cut from the Bank of England later this year. The Labour government has pledged to ‘get Britain building again’ by bringing back compulsory housebuilding targets, and to build 370,000 homes a year during the current parliament.

Barratt deal to take over Redrow edges closer after competition ruling
The mega-merger between two of the country’s largest housebuilders is set to go ahead after the Competition and Markets Authority (CMA) found that housebuilder Barratt Homes’ £2.5bn buyout of Redrow only raises local competition concerns in one small part of the country.

The competition watchdog raised concerns over the area around Whitchurch, Shropshire, where it said the two companies hold a high share of the land, but it is not concerned on a national level. Barratt and Redrow now have the opportunity to submit proposals, which address the CMA’s concerns in the local area, to avoid the probe moving to a more in-depth review. Barratt and Redrow now hope their merger can be completed by the end of this year.