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Avoiding housebuilders in pensions portfolio

Hi all. I've finally got to a stage where I can start putting money into a pension. Since watching the excellent, if depressing, BBC documentary "Britain’s Housing Crisis: What Went Wrong?" in which Martin Lewis gets really angry (and rightly so!), I asked my IFP to avoid housebuilders when he compiles the investment portfolio.

He has come back and said that it's hard to find funds which don't invest in housebuilders, and that avoiding them might expose me to a higher level of risk. Does anyone know how I might compile a list of the worst/least ethical offenders, or do I just go for the big players? Barrett, Taylor Wimpey, Persimmons, Woodrow etc.

The reason I feel so strongly about this is because these companies (allowed by successive governments) are in a very large way responsible for the housing crisis because they restrict the volume of houses that they themselves could build because the high demand vs supply makes each development more profitable, and them and their shareholders richer. I live in an area where young people don't have much chance of renting a home, let alone owning one, for which I directly blame the greedy, self-serving developers.
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Comments

  •  I live in an area where young people don't have much chance of renting a home, let alone owning one, for which I directly blame the greedy, self-serving developers.
    I would hazard a guess that its the government of the day that encourages/allows them to do this
    "All lies and jest, still a man hears what he wants to hear and disregards the rest”
  • dunstonh
    dunstonh Posts: 118,550 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    I asked my IFP to avoid housebuilders when he compiles the investment portfolio.
    Given how small they are in any portfolio, that would be nearly impossible to fulfil.

    Your allocation to UK equity and then the allocation to homebuilders is likely to be insignificant.

    Does anyone know how I might compile a list of the worst/least ethical offenders, or do I just go for the big players? Barrett, Taylor Wimpey, Persimmons, Woodrow etc.
    You would need to build your own portfolio of single company shares.





    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Pat38493
    Pat38493 Posts: 3,122 Forumite
    Tenth Anniversary 1,000 Posts Name Dropper Combo Breaker
    dunstonh said:
    I asked my IFP to avoid housebuilders when he compiles the investment portfolio.
    Given how small they are in any portfolio, that would be nearly impossible to fulfil.

    Your allocation to UK equity and then the allocation to homebuilders is likely to be insignificant.

    Does anyone know how I might compile a list of the worst/least ethical offenders, or do I just go for the big players? Barrett, Taylor Wimpey, Persimmons, Woodrow etc.
    You would need to build your own portfolio of single company shares.





    Also as mentioned above, housebuilders are private businesses operating in a capitalist system and will do whatever it takes to maximize profits within the regulatory framework.  The real issues are around a planning system that's not fit for purpose and lack of regulatory action by government forcing the right things to happen or making it not cost effective to do it any other way.  

    And also that about 80% of the privately owned land in the UK is either owned by developers sitting on it, or by a relatively small number of rich landowners who don't have any interest in giving it up for building work at a fast rate.

    Good luck getting that sorted as most MPs and local politicians are faced by constituents who demand that a lot more houses are built.... in someone else's town, and none in their town!

    Refusing to invest in house building companies isn't going to solve that.
  • sevenhills
    sevenhills Posts: 5,938 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Pat38493 said:
    Good luck getting that sorted as most MPs and local politicians are faced by constituents who demand that a lot more houses are built.... in someone else's town, and none in their town!

    Refusing to invest in house building companies isn't going to solve that.

    In my experience, MPs are the leaders of the NIMBYs.
    I have a Taylor Wimpey within my 15 shares, I don't believe personal action by one or a small number of people can affect a share where money comes from around the world.
  • Hoenir
    Hoenir Posts: 5,606 Forumite
    1,000 Posts First Anniversary Name Dropper
    You'll presumably be happy to own shares in the top performing US multinational companies though. Despite the lengths that they go to enhance profit margins, operating in a monolostic manner while paying the minimal amount of corporation tax globally that they can. While rewarding their senior executives with bumper pay packages. 
  • artyboy
    artyboy Posts: 1,375 Forumite
    1,000 Posts Second Anniversary Name Dropper
    Indeed, who could possibly have thought that "ethical" was such a subjective term 🤣

    I suspect that the OP is on a hiding to nothing here. Unless they only invest in ex-U.K. funds. Because foreign housebuilders are all sweet and lovely.
  • Cus
    Cus Posts: 703 Forumite
    Fifth Anniversary 500 Posts Name Dropper
    Unless you just buy individual shares, you can't restrict to your own requirements. No nestle due to Russia, no Tesla due to Musk, etc etc, the list could go on and on.
  • ukdw
    ukdw Posts: 302 Forumite
    Eighth Anniversary 100 Posts Name Dropper
    I wonder if it possible to achieve what you want with some sort of offsetting financial instrument.  I.e, if there is a fund with 100 companies in it and would want to own shares in 99 of them, then rather than buying 99 individual shares is there any way to buy the 100 in the pension and then somehow have a short position at the appropriate level on the one that you don't want?
  • Linton
    Linton Posts: 17,925 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Hung up my suit!
    It all seems a bit pointless to me.  You buying a or shorting a share only affects the issuing company very indirectly (unless new shares are being issued) since your trade is matched by the reverse trade made by someone else. 

    Thus any gain you make comes from other people in the market not the issuer. 
  • Qyburn
    Qyburn Posts: 3,131 Forumite
    1,000 Posts Fourth Anniversary Name Dropper
    Surely "investing in" isn't strictly correct.  Unless you subscribe at start up, or at floatation, the company doesn't receive any of your money whether you buy shares or buy into a fund that holds their shares.
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