Belvoir, Property Franchise: Stocks you may want to add to your portfolio

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Belvoir, Property Franchise: Stocks you may want to add to your portfolio

 Belvoir, Property Franchise: Stocks you may want to add to your portfolio
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Highlights

  • The proportion of homes sold to landlords has hit a five-year high since the UK government’s buy-to-let tax crackdown six years ago.
  • Across the country, landlords purchased one in every 10 or 13.9% of properties in the first three months of 2022, up from 12% in Q1 2021.
  • Around 42,980 homes were purchased across the UK in the first three months of 2022, which is the highest proportion recorded in Q1 2016.

The proportion of homes sold to landlords has hit a five-year high since the UK government’s buy-to-let tax crackdown six years ago, but buyers are paying above the asking price due to a huge gap between supply and demand.

According to the latest Hamptons Letting Index, landlords across Great Britain purchased one in every 10 or 13.9% of properties in the first three months of 2022, up from 12% in Q1 2021, which is the highest since Q1 2016 when 3% stamp duty surcharges were introduced on additional properties.

 The private rented sector saw a plunge to 5 million last year from the peak of 5.3 million

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The data revealed that investors bought 42,980 homes in January, February, and march, around £8.5 billion worth of property, which is almost double of £4.6 billion recorded pre-pandemic in the same period of 2019.

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The private rented sector saw a plunge to 5 million last year from the peak of 5.3 million, as a return Britons can see an increase in rents with a shortage of supply. It shows that investors are looking to the highest-yielding areas to enhance their return and hedge against the sharply rising inflationary pressure. In February, UK inflation hit 6.2%, which was driven by surging prices of energy, fuel, and food.

The figures revealed that in March, the average monthly cost of a new let increased by 9.1% to £1,115 per calendar month (pcm) in March, as compared to £1,022 pcm in the same period in 2021.

Let us look at 3 real estate companies that you may consider for diversifying your portfolio.

Belvoir Group Plc (LON: BLV)

The company is the UK’s largest franchised property group, engaged in selling supporting and training of residential property franchises. The company provides both sales and letting services across UK and operates though 173 offices in its areas of operations.

The UK’s leading property franchise and financial services group reported an increase in revenue by 37% to £29.6 million in FY2021, up from £21.7 million in FY2020 and its profit before tax recorded a 39% increase to £9.3 million in FY2021, from £6.7 million. Meanwhile, its Net debt significantly reduced by 65% to £1.3 million, from £3.7 million in 2020 despite deploying £4.4 million on two corporate acquisitions, including Nicholas Humphreys and the mortgage advisory arm of the Nottingham Building Society (NBS).

With the current market cap of £100.69 million, the FTSE AIM All-Share listed company’s share value has gone up by 31.58% over the last one year and its year-to-date return stands at 4.96% as of 11 April 2022. The company’s shares were trading at GBX 270.00, at 8:10 AM (GMT), as of 11 April 2022.

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The Property Franchise Group Plc (LON: TPFG)

The company is the UK’s largest multi-brand letting and estate agency franchising group that works as an establishment model zeroed in on the UK private letting and property administrations provided to private customers.

Property Franchise Group Plc has recently announced a 118% increase in its revenue to £24.0 million in FY2021, from £11.0 million in FY2020 and its management service fees increased by 57% to £14.7 million in FY2021, from £9.4 million in FY2020. Whereas its profit before tax increased by 35% to £6.4 million, up from £6.4 million in FY2020.

With the current market cap of £115.35 million, the FTSE AIM All-Share listed company’s share value has appreciated by 81.02% over the last one year and its year-to-date return stands at 18.49% as of 11 April 2022. The company’s shares were trading at GBX 365.00, up by 1.39% at 8:10 AM (GMT), as of 11 April 2022.

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Empiric Student Property Plc (LON: ESP)

The real estate investment trust company offers and operates modern, nominated, direct-let or leased student accommodation located in city center and top university towns in the UK. It is actively engaged in managing student accommodation assets across the country.

The company has reported a decrease in revenue by 6% to £56.0 million in FY2021, from £59.4 million in FY2020 and its profit before tax increased by 222% to £29.2 million in FY2021, from loss of £24.0 million in FY2020.  

With the current market cap of £541.07 million, the FTSE All-Share listed company’s share value has appreciated by 8.42% over the last one year and its year-to-date return stands at 4.77% as of 11 April 2022. The company’s shares were trading at GBX 90.10, up by 0.45% at 8:10 AM (GMT), as of 11 April 2022.

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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.

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