At the same time, operating costs have increased along with landlords’ tax liabilities their rights in matters like evictions have been stripped down, and the mounds of paperwork associated with buy-to-let ownership have shot through the roof. It’s no wonder proprietors have been leaving the sector in their droves over the past year.

Is demand rebounding?

Are signs emerging that investor attitudes towards buy-to-let are beginning to improve, though? A glance at latest figures from UK Finance may suggest so. The body advises there were 5,500 buy-to-let home purchase mortgages completed in May, the same number printed in the corresponding month in 2018. This was the second successive month in which purchases for rental purposes remained stable year-on-year following heavy reversals in prior months.

It’s been suggested the Brexit deadline extension from March 31 to the last day of October has encouraged investors to come out of the woodwork though, if true, I find it hard to fathom. And I’m sure my Foolish colleagues would agree.

After all, the uncertainties of the European Union withdrawal process in the short term and beyond remain considerable. And moving away from Brexit, those diminishing returns and increasing regulatory headaches for landlords represent one heck of a problem. And its one that’s getting ever-worse, given the government’s sharpening strategy of freeing houses for first-time buyers by forcing landlords out.

Gaelic goliath

A much better way for individuals to get exposure to property, I believe, is by buying one of the big-dividend-paying shares which the London Stock Exchange has to offer.

Take Cairn Homes (LSE: CRN) for example. Much has been made of the colossal housing crunch here in Britain, but there exists a shocking shortage of new homes on the other side of the Irish Sea too. And as the likes of Taylor Wimpey and Redrow are doing on these shores, Dublin-based Cairn is ramping up build rates to take full advantage of this.

And why wouldn’t it? Revenues and profits more than doubled in 2018, thanks to ripping homebuyer demand and that supercharged construction activity at the business. No wonder it announced plans in March to open another five sites to build an extra 2,200 homes, adding to the 4,400 it already had sitting in the pipeline.

It’s not a shock to see analysts predicting a near-90% earnings surge in 2019, and it’s quite probable the bottom line will keep galloping at a spectacular rate. Ireland’s Economic and Social Research Institute estimates 35,000 new homes will be needed each year over the medium term, almost double the current annual build rate. And given the lack of government work on this front, such a shortfall looks set to persist, underpinning business for the home creators like Cairn.

One final thing. At current prices, Cairn trades on a cheap forward P/E ratio of 14.9 times and carries a bulging corresponding dividend yield of 5.8% too. All things considered, I think the Irish builder is a much, much better bet than buy-to-let right now.

The post Is buy-to-let FINALLY making a comeback? appeared first on The Motley Fool UK.

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Royston Wild owns shares of Taylor Wimpey. The Motley Fool UK has recommended Redrow. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The brickmaker’s share price infamously took one hell of a whack last year because of forced production shutdowns. But improving sentiment towards the housebuilding sector has carried it higher since the turn of the year (up 30% from January 1, in fact).

Despite this uplift, the FTSE 250 firm still changes hands on a cheap forward P/E ratio of 13 times, comfortably inside the accepted value region of 15 times and below. This is mighty low given the company’s extremely bright earnings outlook, underpinned by the country’s cavernous housing shortage.

Indeed, the desperate need to get Britain building was underlined by the Chancellor Philip Hammond’s spring statement this week in which he vowed to establish an extra £3bn fund to help housing associations deliver an additional 30,000 affordable homes. And this adds to my belief that Ibstock’s bricks should keep selling like the proverbial hotcakes for many years to come.

Big yields!

Ibstock’s gigantic dividend yields of 5.1% for 2019 and 5.4% for 2020 provide more reasons to pay it close attention today. And if that whets your appetite, then Cairn Homes (LSE: CRN) is worth close attention too.

A 3.6% yield for the current fiscal year may be decent rather than spectacular, but thanks to City predictions of strong double-digit earnings rises over the next couple of years, a significantly higher dividend is forecast for 2020 and this yields an eye-popping 6.6%.

The supply crisis in Britain’s homes market is replicated across the Irish Sea, a situation that Cairn is well placed to exploit. The builder saw operating profit more than treble last year to €53.2m as it ramped up production to meet homebuyer demand in Dublin and other popular cities in Ireland. And it’s no wonder that the number crunchers are expecting the bottom line to keep swelling as construction rates rise (work is set to begin on five new selling sites in 2019 alone).

Another brilliant buy

At current share prices, Cairn can also be considered a bona-fide bargain, the firm boasting a prospective earnings multiple of a mere 5.8 times.

The final stock I’m looking at which offers the perfect blend of big dividends and great value is Hays (LSE: HAS). With City analysts expecting the recruiter’s long-running growth story to continue, it’s no surprise that dividends are expected to keep bulging too, meaning giant yields of 6% and 6.7% for fiscal 2019 and 2020 respectively.

And at recent trading levels, Hays boasts a forward P/E rating of just 12.8 times. Share pickers may be put off by continued weakness in its UK marketplace, but still-strong growth in key markets like Germany and Australia still offers plenty to cheer.

Indeed, Hays saw 20 of the 33 nations in which it operates print record performances in the six months to December. And as it invests to broaden its global footprint, I’m convinced that it should continue to thrive.

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Royston Wild owns shares of Ibstock. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Generous lending conditions in the UK are preventing interest from first-time property buyers falling off a cliff. On the whole, though, toughening economic conditions is harming activity in the broader housing market, as is the uncertain outlook created by the country’s ongoing Brexit saga. And these are casting a cloud over online estate agency Purplebricks’ profits picture in the near term and beyond.

These troubles encouraged the business to downgrade its revenue guidance last month to between £165m and £175m for the fiscal year to April, slicing £10m off the upper limit it had previous estimated.

The prospect of worsening trading conditions in the UK are not the only thing to fear, either, as the cost of its international expansion strategy plays havoc with the bottom line. Operating losses more than doubled in the six months to October, to £25.6m from £11.4m earlier, because of swelling marketing and technology costs. Then there’s the huge expansion into North America that’s a very real danger to broker predictions that Purplebricks will finally break into profit in fiscal 2020. 

Safe as houses

If you’re looking for a property-based stock to help you ride out these troubled times then Cairn Homes (LSE: CRN) is a much better option that Purplebricks, in my opinion. The Irish property market is suffering the same homes shortfall prevalent in the UK, and this is helping to drive earnings higher at the Dublin-based business.

Cairn commented last week that “the supply of new homes is less than 50% of annual demand” and that “increasing capacity within the industry remains constrained by the lack of scaled homebuilders.” Some 35,000 new homes are required in the Republic and 20,000 in the company’s geographical sweetspot of Greater Dublin alone, it estimates. And by hiking production, it’s in great shape to ride the country’s supply imbalance.

The average selling price of the builder’s homes soared to €366,000 in 2018, from €315,000 the year before. And with the number of sold units having ballooned to 804 from 418 in 2017, revenues at the business leapt 125% to €337m.

6% dividend yields!

It’s no surprise that City analysts are predicting that Cairn’s profits will bulge 78% in 2019 and 22% in 2020, meaning that it deals on a dirt-cheap forward P/E ratio of 13.7 times. A cause for further celebration is that these bold numbers, and the company’s exceptional cash generation, mean that it’s expected to emerge as a big dividend payer, too. A maiden dividend of 4 euro cents per share is predicted for this year, resulting in a chubby 3.1% yield. And next year, the yield storms to 6.3% thanks to predictions of a doubling in the full-year payout to 8 cents.

Purplebricks offers plenty of long-term potential, sure. But at the moment, its trading troubles at home and arguably overambitious expansion plans make it far too risky. I’d much rather stick with Cairn and its gigantic dividend yields.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Ad budgets have been seriously shrinking for more than a year now, leading to charges against the FTSE 100 firm that it has been too slow in responding to the decline in traditional media forms and in embracing digital communications more effectively.

But what’s really shaken WPP is the departure of Sorrell as he was embroiled in an investigation into possible misconduct. Naturally much speculation is circulating over the direction of the marketing mammoth following its creator’s exit, while talk of a break-up of the group is also doing the rounds.

These issues have caused WPP’s market value to contract more than 40% from the all-time highs struck in March 2017. For long-term investors, however, I think now could be a great time to pile in — the company’s steady (if slow) move into the digital sphere is bearing fruit, and the exceptional revenues opportunities of its pan-global footprint and strong emerging markets exposure are also worth paying attention to.

Besides, the departure of its veteran head could provide WPP with the fresh injection of ideas that it has been crying out for of late.

Set to strike back?

And I reckon now is a brilliant opportunity for income investors to buy-in today. WPP has been a favourite among dividend chasers for many years, with shareholder rewards having risen by more than 75% during the past five years against a backdrop of constant profits growth.

Reflecting current trading troubles, earnings at the firm are expected to fall 26% in 2018, meaning City brokers are expecting the dividend to remain on hold at 60p per share.

In better news however, this projection still yields a mighty 5.3%. And looking further down the line, in 2019 WPP is expected to snap back into earnings expansion with a 4% rise, this bubbly prediction also creating expectations of fresh dividend growth as well. A 62.4p payment is currently predicted, a reading that nudges the yield to 5.5%.

Clearly WPP is not without its degree of risk. But I would argue though that this is reflected in the stock’s ultra-low forward P/E ratio of 9.5 times.

Build brilliant returns

Now Cairn Homes (LSE: CRN) may not be paying the sort of monster dividends that can be found over at WPP. Nor is it matching the colossal payouts afforded by most of London’s listed housebuilders.

However, the yawning supply imbalance in the Irish homes market still makes the business an excellent stock selection in my opinion. Furthermore, with Cairn lighting a fire under production rates profits really look likely to fly, as underlined by City forecasts.

After swinging back into profit in 2017, the builder is expected to keep up the pace this year and record an 888% bottom line improvement. A more modest 65% advance is estimated for next year, although clearly this is not to be scoffed at.

At current prices Cairn Homes deals on a dirt-cheap forward PEG multiple of 0.2 times. This is far too cheap given that its robust earnings outlook stretches a long, long way into the future.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

As such, now could be the right time to buy housebuilders. With population growth expected to remain high and there being a relatively constrained amount of new supply, these two stocks could be worth buying at the present time.

Improving performance

Reporting on Tuesday was Irish housebuilder Cairn Homes (LSE: CRN). The company’s performance in 2017 was relatively upbeat, with it completing 418 unit sales at an average selling price of €315,000. This is considerably higher than the previous year, where 105 units were completed at an average selling price of €295,000.

Higher pricing and volume contributed to a rise in revenue of 3.7 times. This helped to push the company’s operating profit up from €3.6m in 2016 to €15m in 2017. Further growth could be ahead, with the business active on 11 developments which are expected to deliver in excess of 3,650 new homes in total.

Looking ahead, Cairn is forecast to post a rise in its bottom line of 85% in the next financial year. This puts it on a price-to-earnings growth (PEG) ratio of just 0.2, which suggests that it could offer significant upside potential. Although there is the prospect of a tightening monetary policy across the Eurozone over the coming years, this is likely to take place at a slow pace and could mean that demand for new homes remains far higher than current levels of supply.

With Cairn due to commence dividend payments in the next financial year, it could offer significant dividend growth potential in the long run.

Total return potential

Also offering the prospect of high capital growth in the long run is UK housebuilder Bellway (LSE: BWY). It appears to offer a solid balance sheet which could help it to perform well in various trading conditions. And with it having a price-to-earnings (P/E) ratio of just 7, it appears to offer a wide margin of safety.

Certainly, there are risks to the future prospects of housebuilders. This week the government announced plans to tighten up the planning process, with a ‘use it or lose it’ standpoint set to be adopted regarding planning permission. The aim of this to increase the number of houses being built, as well as prevent builders from accumulating large land banks.

However, the fundamentals of the market remain solid. High demand backed by government policies such as stamp duty relief for first-time buyers and the Help to Buy scheme mean that current supply levels are likely to fall significantly short of those required.

As such, Bellway and its sector peers could enjoy positive trading conditions from which to generate rising levels of profitability. This situation looks set to continue and may lead to a significant rise in the company’s share price in future years. As a result, its dividend yield of 4.5%, covered three times by profit, could hold significant appeal.

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Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

However, the accountancy giant has fallen to three-month lows in Wednesday trading, with investors taking fright after the release of first-quarter trading numbers. The share was last 9% lower in the day.

Don’t be hasty!

Sage declared today that group organic revenues rose 6.3% between October-December, disappointing market expectations and signalling a soft start to the year.

I think that today’s sell-off is looking just a tad OTT. However, even if it also reflects not-insignificant amounts of profit booking after recent share price strength, Sage has seen its market value swell 30% in the 12 months to the start of today’s trading.

Indeed, there was still plenty to cheer in the FTSE 100 giant’s latest release. Organic recurring revenues grew 7% in the first quarter, thanks to software subscription growth of 26%.

These early results haven’t exactly spooked Sage either, with chief executive Steve Hare commenting: “Quarter one results are in line with our expectations.” He added that the huge sums it has dedicated to sales training in the period has pushed some revenues into the second quarter.

And Hare expects sales to pick up steam in the months ahead, noting: “We expect acceleration throughout the year including a stronger quarter two and we reiterate our full year guidance of around 8% organic revenue growth and around 27.5% organic operating margin for [fiscal 2018].”

Bright forecasts

Sage has long been a reliable pick for investors seeking robust earnings growth, and City analysts are not expecting the firm’s bottom line to stop swelling any time soon.

A 12% profits improvement is forecast for the year to September 2018, and an additional 10% increase is forecast for next year.

And this bright outlook means that share pickers can look forward to increasingly-appetising dividends, too. Sage’s ultra-progressive policy is expected to push the dividend from 15.42p in fiscal 2017 to 17p this year, and to 18.7p in the following period, so share pickers can bask in chunky yields of 2.3% this year and 2.5% next.

Sage can still be considered an expensive pick despite today’s market slump, its forward P/E ratio of 22 times sailing above the widely-regarded value terrain of 15 times and below.

But in my opinion the company is worthy of this premium given the terrific progress it is making in the growth market of North America. And with new product launches in recent months set to be followed with more in the months ahead, I expect sales to pick up sooner rather than later.

Home comforts

The gaping imbalance between homes supply and demand in Ireland means that Cairn Homes (LSE: CRN) is another great growth bet for investors to tap into today.

Just this month, the Dublin business commented: “The supply of new residential homes in the Irish market will continue to significantly undershoot demand in 2018 and 2019,” adding: “This, allied with strong demographics, strengthening mortgage market fundamentals and a growing economy are all supportive of Cairn’s business model.”

So in 2018, City brokers are predicting that earnings will explode 427%, an estimate which also leaves the builder dealing on a dirt-cheap forward P/E ratio of 9.9 times. Another 81% advance is forecast for 2019, and it’s not difficult to see profits powering higher beyond this as Cairn plans to turbocharge build rates through to the end of the decade.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Sage Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The Irish homebuilding firm today announced that for the year to 31 December, revenues increased significantly to €149m from €40.9m and the company is expected to report EBITDA for the full year of €15m at the high end, up a staggering 290% from the €3.8m reported for 2016. 

And it looks as if this growth trend is set to continue as according to today’s press release, the company is starting 2018 with a “with a strong forward sales pipeline with a net sales value of €134.3m…which underpins H1 2018 sales.” What’s more, CEO Michael Stanley is highly optimistic about the group’s future growth potential thanks to the “historical cost of our land bank” as well as the firm’s “focus on competitively priced houses and premium apartments.” 

Cheap growth

City analysts appear to agree with management’s outlook. Indeed, analysts have pencilled in revenues of €344m for full-year 2018, and a pre-tax profit of €58m, up five-fold from 2017’s predicted figure of €10m. Based on these numbers, analysts have the shares trading at a deeply discounted forward earnings multiple of 7.7, which to me seems too cheap for such a rapidly growing business. That’s why I’d buy the stock for 2018. 

One of a kind 

Shares in Abcam (LSE: ABC) have surged by more than 126% excluding dividends over the past five years, and despite this expansion, I believe that the company still has plenty of room left to grow (although my Foolish colleague Roland Head seems to disagree). 

Today the supplier of life science research tools reported a half-year trading update for the six months ended 31 December showing revenue growth of 11%. All product categories saw sales up “ahead of estimated underlying market growth rates.” 

Life sciences is a niche market, so those companies that have established a reputation for themselves have a substantial competitive advantage. And for Abcam, a business well-established in the specialist market of life science research tools this advantage isn’t going to disappear anytime soon. The company is investing heavily in improving its offering to customers, devoting funding to researching new devices and product lines for customers. This spending should help keep the firm ahead of competitors and ensure stable growth going forward. 

Growth through research 

City analysts are expecting the firm to report earnings per share growth of 19% for the year ending 30 June 2018 on a pre-tax profit for £75m. These figures might come in above expectations, however, as today the group warned that it will see a tax benefit of up to £7m due to changes in US tax law. 

Unfortunately, shares in Abcam are not cheap. They currently trade at a forward P/E of 34.6. Still, while most companies do not deserve such a lofty valuation, considering the firm’s substantial competitive advantage, and double-digit earnings growth, I believe that this is a premium worth paying. 

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Rupert Hargreaves owns no share mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The Leeds business dropped 33% after announcing that it “has further revised its expectation of operating performance over the remaining months of the financial year.” It now anticipates operating profit of £3.5m to £4m for the 12 months ending March 2018.

The news comes just three months after WYG advised that profits would be “substantially lower than current market expectations” in another  scary update. The company generated adjusted operating profit of £8.8m during fiscal 2017.

In  addition, it said that net debt would range between £6m and £7m for the full year, ballooning from £2.5m as of March.

Consultancy division crumbling

Today it said that its International Development division continues to trade in line with the revised predictions made in August (the firm said that a number of construction project delays had dented performance here in recent months).

But it added that conditions at its Consultancy Services business have continued deteriorating. The unit “has continued to experience lower trading volumes than anticipated as a result of the loss or delay of certain new contracts we had previously expected to win in the current period, and significantly lower than anticipated volumes of work under certain major framework contracts.”

City analysts had been expecting earnings to topple 34% in the current year even before today’s update. This projection, as well as the touted 16% earnings rebound in fiscal 2019, would now appear on course for swingeing downgrades in the days and weeks ahead.

I reckon it would take a brave investor to buy the firm before next month’s half-year results (currently slated for December 5), a release that could well reveal further horrors. I reckon WYG should be avoided right now despite its ultra-low forward P/E ratio of 5.7 times.

Home comforts

If you are looking for a construction play with a much-more robust earnings outlook than WYG, I reckon Cairn Homes (LSE: CRN) is a brilliant selection today.

You see, just like in the UK, the yawning supply imbalance in the Irish housing market (and especially in Dublin) is likely to take many, many years to remedy, playing into the hands of the likes of Cairn. The builder saw revenues exploding 157% during January-June, to €41.2m, while its “strong and growing pipeline” jumped to 474 units as of June from 301 units three months earlier.

What’s more, Cairn is planning to light a fire under construction rates to drive profits through the roof. It has plans to build 1,200 homes per year by the end of the decade.

The City is expecting the business to finally swing into the black this year, moving from losses of 0.3 euro cents per share in 2016 to earnings of 1.8 cents in 2017. And earnings are expected to skip to 7 cents in 2018.

In my opinion the Cairn Homes is a great share to buy and cling onto, and particularly given its bargain-tastic forward P/E ratio of 9.7 times.

The post Should you catch falling knife WYG plc after 30% share price drop today? appeared first on The Motley Fool UK.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The Irish business announced that revenues detonated 157% during January-June, to €41.2m, a result that drove gross profit 191% higher to €7.7m.

And sales continue to perform “very well,” the construction firm noted. It enjoyed 94 sales completions in the first six months of 2017, and it boasts a strong and growing pipeline of forward sales of 474 units.

Chief executive Michael Stanley said: “The quality of our land bank and range of houses and apartments are meeting the needs of distinct segments of the market from first time buyers to people trading up or down-sizing… our business model is designed to consistently deliver high quality homes in developments of scale and the market has been responding accordingly.” The company is currently building on nine sites which are on course to deliver 3,250 new homes.

Supply imbalance set to persist

Cairn Homes has seen its share value ascend 30% since the start of the year and, thanks to the vast housing market imbalance on the Emerald Isle, I fully expect it to continue striding northwards.

Indeed, it said today that “the severe supply/demand imbalance in the Irish housing market is more extreme and pronounced today than at the time of our IPO [in 2015].

It added: “While the housebuilding sector is reacting positively to the continually improving macro-economic landscape, the supply of new homes, particularly in Dublin, is still significantly lagging demand which continues to be driven by an ever improving labour market and improved affordability, in addition to a growing population.”

The business estimates that around 18,000 new homes are required in Dublin every year to meet booming buyer appetite and address the city’s long-running property shortage.

Against this backcloth, the City is predicting handsome earnings growth in the years to come — Cairn Homes is expected to flip back into the black with earnings of 1.5 euro cents per share in 2017, before striding to 6.9 cents in 2018.

I reckon growth hunters need to give the homebuilder serious attention right now.

Shining star

Petropavlovsk (LSE: POG) is another stock that has seen its share value surge in recent times, the gold digger rising 14% over the past fortnight as the escalating diplomatic crisis on the Korean peninsula has driven demand for precious metals.

Whilst bullion values have lost some of their lustre since the start of the week, I am confident gold should remain well bought as North Korea does not look likely to step back from the brink any time soon. And on top of this, enduring concerns over the dysfunctional Trump administration in Washington, and uncertainties over the ongoing Brexit saga in the UK, should also keep investor nerves jangling.

And thanks to the extra contribution of rising production levels, the abacus bashers expect Petropavlovsk to generate earnings expansion of 151% and 19% in 2017 and 2018 respectively. I reckon the mining ace is worthy of more than a cursory glance given its mega-cheap forward P/E ratio of 3.7 times.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Bellway

One such company is Newcastle-based Bellway (LSE: BWY), a geographically-diversified developer of traditional family homes and affordable apartments.

Last month, Bellway issued a trading update for the six months to 31 January 2017, which showed the group make a significant increase in both the number of legal completions and the value of the forward order book. Housing completions increased by 6.5% to 4,462, adding to the UK’s much-needed supply of new homes, while its forward order book swelled 9.1% to £1,121m.

Bellway’s share price has outperformed many of its peers and is now trading just below its pre-referendum high of 2,777p. The company has no doubt been helped by its limited exposure to Central London, where prices have remained sluggish since the Brexit vote of last June, and recent stamp duty changes.

Looking forward, Bellway is well placed to benefit from its accelerated pace of new home construction, as demand remains resilient outside of Central London despite the uncertain macroeconomic backdrop. As such, the group is seeing no let up in viewings. Meanwhile, its reservation rate increased by 6% on last year, to 166 homes per week.

With a forward P/E of just 7.8, Bellway trades at a noticeable discount to the sector average of 9.7. However, with a dividend yield of 4.0%, its shares don’t offer as much in terms of income than many of its bigger peers.

Ireland

Irish housebuilder Cairn Homes (LSE: CRN) is my pick for investors who are prepared to wait a couple of years. Cairn Homes listed on the London Stock Exchange only in 2015, and the housebuilder is still in the process of ramping up its construction activity.

The company today announced its 2016 full-year results, which showed an 11-fold increase in revenues to €40.9m on 105 unit completions. The company made a gross profit of €7.1m, up from €0.7m, with a gross profit margin of 17.3%. Operating profit was €3.6m, up from a loss of €3.8m in 2015.

Cairn Homes still has a long way to go before it generates significant profits, but the company is on target to meet its optimistic growth expectations. It expects to complete between 375 and 400 new homes this year, with the number of completions expected to climb to 850 units by 2018 and 1,200 units by 2019.

Moreover, Cairn Homes benefits from favourable fundamentals, as residential property prices are forecast to grow even more robustly in Ireland than in the UK in 2017. The Irish market is set to benefit from a number of bullish tailwinds over the next few years, such as the newly-introduced help-to-buy scheme, the recent relaxation in the Central Bank lending limits and the constrained supply of new homes since the housing crash of 2007.

The post 2 ‘hidden’ growth shares for long-term investors appeared first on The Motley Fool UK.

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Jack Tang has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.