If England's housing market is set to stall, then shares in Inland Homes (INL) are not attractive. We don't think that's likely, especially as mortgages are as cheap as they have ever been, while a raft of government incentives have made it less difficult to reach the first rung of the housing ladder. Meanwhile, Inland Homes has underlying merits that could make it a resilient performer anyway.
- Shares trade far below net asset value
- Strong order book
- Significant land bank
- Rising rental income
- Delays in some completions
- Hardly a yield stock
The company's original business model focused on buying brownfield sites, pushing them through the planning process and selling them to hungry housebuilders. This is still a key source of revenue, but Inland now builds houses for itself as part of a more flexible business model. So it may sell all of a consented site or just part of it, while the use of partners helps to reduce the burden on capital spending.