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Highlights
- The value of homes in Britain has gone up by £1.6 trillion over the last five years.
- The open market value of homes in Britain stands at a total of £9.2 trillion, according to a report from Zoopla.
- Barratt’s forward sales over the past three months have gone up and have crossed the pre-pandemic levels.
According to the latest report, the value of homes in Britain has increased by £1.6 trillion ($2.2 trillion) in the last five years. Over this time period, the value of approximately 12 million homes rose by the national average of £49,000. According to the Zoopla report, £550 billion, which accounts for more than one-third of the total increase, has been witnessed in the past one year alone. The drivers of this increase were the surging demand of buyers and the search for space led by the pandemic.
Since 2016, the ultra-low mortgage rates have supported the continuous price growth in the housing market. Over the past year and a half, the upward pressure on prices has further increased due to supply constraints accompanied by surging demand, as per Zoopla. Pandemic has led people towards a confusing state where they don’t even know what exactly they want from home.
The open market value of homes in Britain stands at a total of £9.2 trillion, according to the report. This amount is equivalent to four times the GDP of the UK and over four times the value of all the companies falling under the FTSE 100 Index. Around £8 billion out of this amount is held within 23.5 million privately-owned homes, and at the same time, five million social homes hold a further £1 trillion.
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The value of nearly 88% of homes in Monmouthshire, Wales has gone up by more than the national average of around £50,000. This figure stands at 83% in Hastings and 82% in Trafford. Southeast has witnessed the maximum increase in total home value over the last five years, even more than London. There was a £294 billion increase in the value of homes in the Southeast in comparison with the £214 billion increase in the capital.
However, despite being responsible for a quarter of the total value of Britain’s homes, London accounts for just 13% of the British housing stock.
Last month, the House Price Index of Rightmove unveiled that an all-time high has been reached by the national average price of properties coming to the UK market, jumping up to £338,462. This surge in prices comes amid the soaring demand leading to cut-throat competition among buyers for the limited properties that are available for sale.
RELATED READ: 3 FTSE 250 stocks to buy amid rising housing prices
Let us explore the investment prospects of Barratt Developments Plc (LON: BDEV), one of the largest developers of residential property in the United Kingdom.
Barratt’s bookings rise amid soaring prices
Barratt Developments, in its latest trading updates for the period from 1 July to 10 October 2021, reported that its forward sales over the past three months have gone up and have crossed the pre-pandemic levels.
The increased sales of the company were driven by the continuous house buying and strong consumer demand, which encouraged the company to work in line with its forecasts of home completion for the current year.
The demand for its high-quality new homes is growing, with 281 net private reservations per average week (FY21: 288; FY20: 262). This has resulted in 0.85 net private reservations per active outlet per average week (FY21: 0.87; FY20: 0.72).
In the reported period, the company delivered 3,699 home completions (including JVs), 8.3% lower than 4,032 completions in the comparable period in FY21. However, the numbers were high, supported by the substantial increase in home completions after the lockdown disruption. Also, the company is witnessing rising customer demand across the country for its high-quality homes.
Barratt Developments plc’s (LON:BDEV) share price performance
Barratt Developments plc’s shares were trading at GBX 675.80, down by 0.94% on 14 October 2021 at 11:42 AM GMT+1.
Barratt Developments plc is a constituent of the FTSE 100 index. Its current market cap stands at £6,972.99 million. It has given a return of 24.17% in 1 year as of 14 October.
