Predictions of a sharp cooldown in British house prices continue to do the rounds, even though those forecasting a market collapse following the summer’s Brexit vote have proved so wide of the mark.
To some extent these forecasts can be expected — after all, tougher regulations for the buy-to-let sub-segment could remove a key demand lever in the years ahead. And of course a likely weakening in the UK economy from 2017 could dent homebuyer confidence.
Having said that, these factors continue to be offset by extremely-favourable lending conditions, helping sales to first-time buyers climb steadily higher. And a shocking shortage of newly-listed properties hitting the market is also keeping the country’s long-running supply/demand in business.
This situation is providing a boost to the likes of Taylor Wimpey (LSE: TW), which advised last week that it “continued to see good demand and solid trading” during the latter half of 2016, and that its forward order book clocked in at a chunky £1.68bn.
I see no reason to expect earnings to collapse at Taylor Wimpey any time soon, a situation that bodes well for the firm’s dividend prospects. The City certainly shares my bullish take, and payments of 13.8p and 14.9p per share are pencilled-in for 2017 and 2018 respectively.
Consequently the housebuilder sports incredible yields of 8.2% and 8.8% for these years.
Electrify your stocks portfolio
And Taylor Wimpey isn’t the only blue chip set to pay market-beating dividends.
Indeed, while much of the UK stock market remains at the mercy of possible political and economic shockwaves in 2017, electricity network manager National Grid (LSE: NG) isn’t as exposed thanks to the essential role of electricity in today’s society. And the company has no competition to battle against in a bid to keep earnings rising.
On top of this, National Grid is chucking vast sums at expanding its asset base in the UK and US to keep revenues flowing in during the years ahead.
The number crunchers certainly believe National Grid has what it takes to keep growing dividends, and have pencilled-in rewards of 44.4p and 45.6p for the periods ending March 2017 and 2018 alone. These projections yield a storming 4.6% and 4.7% respectively.
Corking cartons
I believe British American Tobacco (LSE: BATS) should also remain a safe-haven for income seekers in the years ahead, even through changing social attitudes to smoking and a thriving black market are putting global cigarette sales into reverse.
You see, the likes of knockout brands like Lucky Strike and Pall Mall are helping sales at British American Tobacco to keep tracking higher as they grab share from their competitors. But rising demand for its traditional products aren’t the only reason to be optimistic as the firm sets itself up to ride galloping demand for e-cigarettes through its Vype brand.
Against this backcloth, City brokers expect British American Tobacco to pay dividends of 179p per share in 2017 and 195.4p in 2018. These numbers yield 3.8% and 4.1% respectively.