With the international investment space currently rife with uncertainty, volatility, and what seem to be constantly shifting sands, it’s no surprise that British investors have retreated back into the relative safe haven of UK property. Instead of pouring cash into actual bricks and mortar, though, more and more are looking to homebuilders and construction firms. Despite a recent blip, the numbers indicate it’s a good bet.

London Docklands

Despite the recent downturn’s savage reminder that even property investment offers no certainty, more and more investors are responding to the melodramas, market swings and farces currently shaping global markets by giving UK property another shot. And with good reason, too. Following on from a strong 2014, shares in established British blue-chip property companies have hit dizzying heights since the beginning of 2015.

The likes of Persimmon, Taylor Wimpey, Barratt Developments and others have made gains of up to 50 percent in the course of half a year. Mid-cap housebuilders like Bellway and Bovis Homes have performed with similar panache. On average, housebuilders’ share prices were up almost 13 percent in 2014 in actual terms (and almost 20 percent weighted by market capitalisation). Barrat Developments led the group with an annual gain of 35 percent, and Persimmon wasn’t too far behind with growth in value of 27 percent. There were exceptions – Redrow and Berkeley both lost value – but, overall, housebuilders came second only to REITs, or Real Estate Investment Trusts, which were up almost 20 percent.

At the beginning of the summer, analysts at investment bank Société Générale included five UK companies in its monthly list of 25 companies that it reckons offer some of the most secure dividend payouts in developed equity markets. As a rule, it looks for companies that have a divided yield beyond 4 percent, as well as a robust return on capital and a good steady balance sheet. Alongside Talktalk Telecom and NEXT, there were three housebuilders: Taylor Wimpey, Persimmon and Berkeley Group. Taylor Wimpey is set to support a dividend yield of 5 percent, while Persimmon is set to support a yield of 5.3 percent. In both cases, the payout will be supported one-and-a-half times by earnings per share. Even better, Berkeley Group is set to support a yield of 6.3 percent, which will be covered twice by earnings per share.

The likes of Persimmon, Taylor Wimpey, Barratt Developments and others have made gains of up to 50 percent in the course of half a year.

These gains are all the more remarkable when compared to how some of the traditional reliables have performed. In late July, gold fell to its lowest level in almost five years – and is now almost 40 percent down on the peak value seen in August 2011. The FTSE 100’s gains over the past year have been negligible.

It hasn’t only been construction companies, though, that have gained. It seems, in fact, that everything and anything that is in any way connected to the UK property sector is riding the same wave. Property listing websites, like Zoopla and Rightmove, are up strongly, as are estate agents and valuation companies.

Inevitably, though, when property is doing well, there is inevitably some nervousness. UK house prices are at all-time highs, leading some observers to identify the housing market as an economic risk. Even before the 2015 surge in value, housebuilders’ share prices were, on average, 15 times the long term lows of 2008 (but still 23 percent below their 2007 peaks). And, currently, they’re trading at all-time high valuations. Can it sustain? It depends.

There doesn’t seem to be anything coming down the line to suggest that a slowdown is imminent. House sales are strong and property prices are still rising. The precariousness of the sector was put into sharp focus, though, when Bank of England governor Mark Carney told a Treasury select committee in mid-July that the right time for an interest rate rise was drawing closer. Carney was careful to emphasise that any rises would be gradual and limited, and that the Bank of England would carefully monitor the reactions and effects. Even so, his remarks had a negative effect on housebuilders’ share prices , which are, of course, acutely sensitive to changes in mortgage rates.

Previous to this, the British government’s move to cut tax relief on investment mortgages for higher rate taxpayers had a similar impact, although the subsequent announcement that planning restrictions would be eased had a broadly balancing effect.

As night follows day, skittishness follows buoyancy in the property sector. And that’s what’s happening now. All eyes are on the Bank of England, waiting for a sign or hint of precisely when interest rates will change. It has to be remembered, though, that any rise in interest rates will be on back strong economic growth, which, ultimately, is what the property sector thrives on.