Prices of UK shares continue to struggle as concerns over the fight against Covid-19 rolls on. Virus cases on a global basis are moving higher again and it could be a long time before the back of the pandemic has been broken. Naturally, hopes of a strong economic recovery are looking shakier than they did at the start of 2021.
Clearly, UK share investors need to do their homework before buying for their Stocks and Shares ISA. Sure, the 5 April deadline might be just around the corner. But rushing to beat the cut-off date for the £20,000 ISA allowance without doing proper research could end up costing investors in the long run. Aside from Covid-19, other issues like resurgent trade tensions and soaring global inflation could also significantly harm shareholder returns in 2021, and possibly beyond.
I buy stocks on the basis of making great investment profits over the long haul (say at least a decade). And I think there are many top-quality UK shares that have the strength to ride through this tough period for the world economy and deliver excellent returns over the next decade.
A big opportunity for UK share investors?
I think investing in UK housebuilders could be a great way to try and make money over the next decade. Homes demand in Britain is soaring past supply and I don’t expect this theme to run out of steam any time soon.
It’s not just huge government support and low interest rates that are helping drive demand for Britain’s newbuilds though. Intensifying competition among mortgage lenders is also boosting the attractiveness, not to mention the affordability, of buying a home. This week, Yorkshire Bank announced it was bringing back 95% mortgages for first-time buyers. The competitive landscape has also led to the first 40-year fixed-rate mortgage being launched in the UK too.
A FTSE 100 star
I think The Berkeley Group (LSE: BKG) is a top UK share to buy to latch onto this phenomenon. This builder focuses on the red-hot London market and it has a gigantic land bank which should support build rates beyond 2030 too. The business added an extra four sites to its land holdings in the six months to October, providing space for an extra 2,800 homes. Today, the FTSE 100 company trades on an undemanding forward price-to-earnings (P/E) ratio of 15 times. It sports a dividend yield north of 4% for this year too.
Remember though, that any change to the supportive government policy later this decade could damage the broader homes market. Ideas like the Help to Buy equity loan programme and the Stamp Duty holiday have given home sales a significant boost in recent times. And this could have a significant impact on demand for The Berkeley Group’s newbuilds. That said, I still think the potential benefits outweigh the risks.
