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Highlights
- High growth momentum in the housing market is expected to reduce the impact of a suggested increase in mortgage rates and higher living costs.
- The UK housing market is expected to register sales of around 1.5 million this year, valuing nearly £500 billion, according to a report by Zoopla.
The UK housing market is expected to register sales of around 1.5 million this year, valuing nearly £500 billion - the highest since 2007.
According to Zoopla, a property website, though the housing transactions are slated to decline to 1.2 million next year, but the high growth momentum in the housing market is expected to reduce the impact of other setbacks, such as the risk of an increase in mortgage rates and higher living costs. Let us explore the investment prospects in the top 5 FTSE listed housing stocks amidst growing sales.
Redrow Plc (LON: RDW)
Redrow is FTSE 250 listed housebuilding company. The company operates in the UK via a network of 14 operational divisions. It has secured four separate planning permissions for 253 upcoming home projects in South East Wales.
Redrow’s legal completions increased by 39% year-on-year to 5,620 in 2021 (year ended 27 June 2021) compared to 4,032 in 2020. Its revenue rose by 45% to £1.94 billion in 2021 compared to £1.34 billion. The company’s revenue for 2021 was only 8% below the 2019 figure. The board announced a final dividend of 18.5 pence per share to shareholders.
The shares of Redrow closed at GBX 642.20, up by 0.85% on Monday, 25 October 2021. The market cap of the company is £2,242.75 million, and the shares of Redrow returned 35.26% to shareholders in the last one year.
Barratt Developments Plc (LON: BDEV)
Barratt Developments is a residential property developer with operations across Wales, Scotland and England. The company registered strong consumer demand for new homes with net private reservations per average week of 281 for the period 1 July to 10 October 2021 compared to 288 in FY 2021.
During the 1 July to 10 October 2021 period, Barratt Developments delivered 3,699 home completions (including JVs) compared to 4,032 in the same period in 2020. Barratt expects to record wholly-owned home completions in the range of 17,000 and 17,250 in FY22 (ending 30 June 2021). Barratt’s board announced a final dividend of 21.9 pence per share for FY 2021.
The shares of Barratt Developments closed at GBX 646.00, up by 0.53% on Monday, 25 October 2021. The market cap of the company is £6,568.22 million, and the shares of Barratt Developments returned 19.41% to shareholders in the last one year.
Persimmon Plc (LON: PSN)
Persimmon is FTSE 100 listed UK-based housebuilder. Its total house completions were recorded higher at 7,406 in H1 2021 compared to 4,900 in H1 2020. The company’s new home average selling price increased from £225,066 in H1 2020 to £236,199 in H1 2021.
The group’s total revenue stood at £1.84 billion in H1 2021 compared to £1.19 billion in H1 2020. Its profit before taxation was £480.1 million in H1 2021 compared to £292.4 million in H1 2020. Persimmon’s board announced an interim dividend of 125 pence per share and an additional dividend of 110 pence per share for the period.
The shares of Persimmon closed at GBX 2,629.00, up by 0.73% on Monday, 25 October 2021. The market cap of the company is £8,328.52 million.
Rightmove Plc (LON: RMV)
Rightmove is a leading real estate and property marketplace. Its portal generated record engagement levels of an average 1.7 billion minutes per month and total of 1.4 billion site visits, representing an increase of 56% year-on-year in H1 2021.
Rightmove’s revenue stood at £149.9 million in H1 2021 compared to £94.8 million in H1 2020. The company’s operating profit was £114.9 million in H1 2021 compared to £61.7 million in the same period in 2020. Its board announced an interim dividend of 3.0 pence per ordinary share for 2021.
The shares of Persimmon closed at GBX 700.40, down by 0.34% on Monday, 25 October 2021. The market cap of the company is £5,991.24 million.
Savills Plc (LON: SVS)
Savills is a provider of real estate services. Savills’ group revenue was £932.6 million in H1 2021 compared to £791.4 million in H1 2020. Its profit before tax increased from £7.7 million in H1 2020 to £63.8 million in H1 2021.
For the period H1 2021, Savills’ board recommended an interim dividend of 6.0 pence per share.
The shares of Savills closed at GBX 1,389.00, up by 0.36% on Monday, 25 October 2021. The market cap of the company is £1,980.26 million, and the shares of Savills returned 62.46% to shareholders in the last one year.
