BCPT, AEWU, SUPR: Stocks to eye as housing market is expected to cool down

Highlights

• UK house prices have hit a record high level in June, but they are expected to decline over the coming months, as per Rightmove.
• The asking prices have been surging for five months in a row, increasing by 0.3% or £1,113 in June.
• Rightmove expects the annual rate of increase of house prices to decline from the present 9.7% to nearly 5% by the end of this year. 

UK house prices have been hitting the roof lately, but the housing market is expected to cool down soon. According to the latest report by property website Rightmove, UK house prices have hit a record high level in June, but they are expected to decline over the coming months amid the rising interest rates and the spiraling cost-of-living crisis.

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The asking prices have been surging for five months in a row, increasing by 0.3% or £1,113 in June, hitting £368,614. Despite continuously increasing prices, the market is expected cool down as the speed at which the prices are rising is gradually declining. The price hike in June was the weakest monthly increase since January.

In response to the rising living costs, the Bank of England (BoE) has recently raised the interest rates to 1.25%, giving hints for more rate hikes in the upcoming months. With the rising rates, the housing affordability crunch would potentially impact the overall market behaviour more in the future. After a robust first half, house prices are expected to dip in the second half of the year.

Rightmove expects the annual rate of increase of house prices to decline from the present 9.7% to nearly 5% by the end of 2022. As the UK housing market cools down, investors can keep an eye on the real estate stocks offering decent returns. Let’s look at the share price performance of 3 such UK real estate stocks.

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1. BMO Commercial Property Trust Ltd (LON: BCPT)

The shares of BMO Commercial Property Trust Ltd were up by 0.34% at 8:13 AM (GMT+1) on 20 June 2022, at GBX 116.60. On a year-to-date basis, the FTSE250-listed company has given its shareholders a return of 11.05% as of 20 June 2022, while its one-year return stands at 32.50%. The current market cap of the company stands at £841.16 million. 

2. AEW UK REIT plc (LON: AEWU)

The shares of AEW UK REIT plc were trading at GBX 116.20 at 8:14 AM (GMT+1) on 20 June 2022. On a year-to-date basis, the company has given its shareholders a return of 5.48% as of 20 June 2022, while its one-year return stands at 26.44%. The current market cap of the company stands at £187.26 million.

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3. Supermarket Income REIT plc (LON: SUPR)

The shares of the Supermarket Income REIT plc were down by 0.77% at 8:17 AM (GMT+1) on 20 June 2022 and were trading at GBX 129.00. On a year-to-date basis, the company has given its shareholders a return of 5.97% as of 20 June 2022, while its one-year return stands at 4.86%. The current market cap of the company stands at £1,611.82 million.