BCPT, PCA, AEWU- Stocks to eye as house prices surge

Highlights 

• House prices in the UK are going up even when the demand is showing signs of slowdown, as per RICS.
• The RICS survey showed that expectations for the sale of houses over the next one year were the lowest since March 2020.
• Even though the demand has started to fall, the average price of UK homes is still rising due to stock shortfalls.

House prices in the UK have been skyrocketing over the past months, and the trend of rising prices is continuing, despite the demand slowing down. According to the results of the latest survey conducted by the Royal Institution of Chartered Surveyors (RICS), the inquiries from new buyers have been falling for three straight months now. One in four of the property professionals who were a part of the survey reported that inquiries from new buyers had fallen in July.

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Expectations for the sale of houses over the next one year were the lowest since March 2020, when restrictions and lockdowns were imposed due to the Covid-19 pandemic. Even though the RICS survey was carried out prior to the Bank of England (BoE) going for an interest rate hike of 0.5% last week, the rising interest rates and the spiralling cost-of-living squeeze were believed to be the reasons for the housing market showing signs of a slowdown. The recent rate hike was the largest single leap in rates since 1995.

Even though the demand has started to fall, the average price of UK homes is still rising due to stock shortfalls. According to almost two-third of the surveyors, the prices had gone up in July, and even though they plunged from April’s 78%, they were still higher than the long-term average price. The broad consensus was that there will potentially be an increase in the house prices over the coming year.

Amid the rising house prices, UK investors can keep an eye on the following real estate stocks suggested by Kalkine Media® which are doing well at the time. 

Balanced Commercial Property Trust Ltd (LON: BCPT)

The shares of the company exposing UK investors to prime commercial properties, Balanced Commercial Property Trust Ltd, were trading at GBX 115.40 at 11:10 AM (GMT+1) on Thursday. The FTSE 250-listed trust currently has a market cap of £818.82m and has provided investors with positive returns on one-year and year-to-date (YTD) basis as of 11 August, which stand at 17.76% and 10.02%, respectively. The BCPT, during the intra-day trading had an RSI of 50.40, indicating interest from the market participants. The BCPT offered an annual dividend yield at 3.0% with an EPS of 0.20.

Palace Capital plc (LON: PCA)

Palace Capital plc is primarily an entity which invests in regional properties. The PCA shares on 11 August plunged by 2.08% at 11:23 AM (GMT+1) and were trading at GBX 282.00. The real estate business firm had a market cap of £126.80 million and has provided investors with positive returns on one-year of 4.83%. Courtesy of the positive mood in the market, the RSI of the PCA stood at 52.86 during intraday trading. PCA had an annual dividend yield offered at 3.7%.  

AEW UK REIT plc (LON: AEWU)

The shares of the real estate investment business entity, AEW UK REIT plc, surged by 0.52% at 11:28 AM (GMT+1) on Thursday and were trading at GBX 116.20. The firm currently has a market cap of £183.14 million and has provided investors with impressive one-year and YRD returns of 11.30% and 3.01%, respectively. The AEWU had a positive earnings-per-share of 0.14.