As UK house sales hit pre-COVID levels, which stocks should you consider?

The property market in the UK is showing signs of a cooldown amid the record-high inflation levels and the cost of living crisis. However, the latest data shows that the home transactions in the country are returning to the pre-pandemic levels. 

According to the latest figures released by the HM Revenue and Customs (HMRC), house sales in July rose by 6% against July 2019. Compared to numbers for July last year, the transactions saw a one-third increase, indicating the typical summer spike in demand.

Figures from the HMRC showed that an estimated 110,970 residential homes switched owners in July, against the 83,520 reported in July 2021. It was also 2.6% higher than the five-year pre-pandemic July average.

Image source: ©2022 Kalkine Media®

The transactions increased 7.2% over June, which witnessed a cooldown in demand due to the lack of real estate for sale.

On the other hand, a separate analysis from the Office for National Statistics (ONS) revealed that Britain's real estate market is losing momentum. Going by the numbers, the average house price fell to £286,000 in June. However, despite the fall, the number indicated a 7.8% increase over the year to June. The increase represents the sharp slowdown in the market.

In the wake of this information, Kalkine Media® has selected a few London-listed real-estate stocks that investors can look at.

Rightmove Plc (LON: RMV)

The British firm operates the country's largest online real estate website. In the first six months of 2022, the company generated a revenue of £162.7 million, 9% higher than H12021, and its operating profit rose by 6% to £121.3 million. The FTSE 100 constituent holds a market cap of £5,093.69 million and has provided a negative return of -13.87% to investors in the past year. The year-to-date return stands at -23.60%, while the EPS is currently at 0.21. Shares of the company were trading at GBX 607.40, down 0.39%, as of 11:30 am GMT+1 on 24 August.

Persimmon Plc (LON: PSN)

Persimmon is a British housebuilding business constituent of the FTSE 100 index. In the six months to 30 June 2022, it posted total group revenues of £1.69 billion, lower than the £1.84 billion it generated during the same period last year. The pre-tax profit also fell from £480.1 million in H12021 to £439.7 million in H12022. Persimmon's shares were trading at GBX 1,550.50, down 2.02%, as of 11:36 am GMT+1 on Wednesday. 

Taylor Wimpey Plc (LON: TW.)

Taylor Wimpey is another leading British home construction firm with 24 regional businesses. In its half-year results for 3 July 2022, the company posted revenue of £2,076.8 million, 5.4% lower than the same period in 2021. The operating profit, however, saw a marginal increase of 0.1% from £424 million to £424.6 million. The firm holds a market cap of £3,994.68 million, and its shares have given investors a negative return of -35.91% over the past year. The stock traded at GBX 111.20, down 1.68% as of 11:37 am GMT+1 on Wednesday.

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.