- Housing rates in the country jumped by 15.5% in annual terms in July.
- The prices are expected to rise further this year due to recent interest rate hikes.
The UK property market is showing signs of a cooldown, but that isn't stopping the house prices from moving upward. As per the latest data from the ONS, home rates in the country jumped by 15.5% in annual terms in July. This is also the biggest increase in 19 years.
The huge jump in prices indicates how they were impacted during the same month last year when the government announced a tax break for property buyers.
In June, property prices had jumped by 7.8%, a massive slowdown from May.
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House prices are expected to rise further this year as soaring inflation and the cost-of-living crisis has forced the Bank of England (BoE) to raise the interest rates. The central bank has warned that the economy may slip into recession in the last quarter of this year, hinting that more interest rate hikes may be on the cards.
New mortgage lending rises
Meanwhile, the value of new mortgage commitments made by UK banks rose 1.7% to £83.9 billion in the second quarter of 2022. According to the Bank of England figures, the outstanding value of all residential mortgage loans has hit £1.648 billion.
In the wake of this news, let us explore a few London-listed stocks and analyse their investment prospects.
Rightmove Plc (LON: RMV)
The FTSE 100-listed company operates the UK's biggest online real estate classifieds platform. It will pay a dividend of £0.033 per share to the shareholders on 28 October. With a market cap of £5,149.03 million, the stock value has depreciated by over 16% in the past 12 months and by more than 22% on a year-to-date or YTD basis. The EPS or earnings per share are in the positive territory at 0.21.
Taylor Wimpey Plc (LON: TW.)
Taylor Wimpey is a leading British real estate business. Over the last few months, the stock has garnered much interest from investors due to its price movement on the London Stock Exchange. TW. has a market cap of £4,644.49 million, and its share price has plunged over 37% in the past year. The year-to-date return also stands in the negative territory at -38.78%.
Vistry Group Plc (LON: VTY)
Vistry Group is another popular UK homebuilder and a constituent of the FTSE 250 index. It reported excellent performance in the year's first half, with its adjusted gross margin hitting 23%. The group adjusted pre-tax profit rose by 14.3% to £189.9 million. With a market cap of £1,681.69 million, the stock has witnessed a decline of over 36% in the past 12 months.
Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.