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Highlights
- The housing price in the United Kingdom rose by nearly 9.8% in 2021 to hit a record high of £276,091 for an average home in December.
- The housing sector continues to see strong demand, which outstrips the supply of new homes.
The housing price in the United Kingdom rose by nearly 9.8% in 2021 to hit a record high of £276,091 for an average home in December. The housing rate rose at its fastest pace since 2007 as per the latest data revealed by the Halifax House Price Index, which is the longest running monthly house price series covering the whole country.
As per the data, the average house price in the UK made a new high on eight different occasions in 2021 despite the lockdown like situation throughout the year, which indicates a high demand for new properties.
According to industry experts, the boom in the property sector was driven by the stamp duty holiday in the UK, which ended in September 2021. In addition, the record low-interest rates and demand for bigger space amid lockdown and remote working scenarios fueled the homebuying trend. Wales saw the biggest price rise in the UK, where the average home was at £205,579, up by 14.5%, while in England, the north-west region saw 11.8% increases to £211,954.
Halifax predicts housing prices growth to slow down in 2022 compared to the previous two years because of the rising interest rate scenario in the UK. Also, rising inflation will put a burden on the household budget, resulting in lower savings. However, the housing sector continues to see strong demand, which outstrips the supply of new homes.
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Let us look at FTSE listed housing stocks that could benefit from a positive sector outlook:
Berkeley Group Holdings Plc (LON: BKG)
FTSE100 listed company offers the development of mixed-use residential properties in the United Kingdom. St Edward, Berkeley First, Berkeley Partnership are some famous brands under which the company sells its inventory.
The company’s business continues to see solid demand from consumers. For the six months ended 31 October 2021, the company reported a 36.3% rise in revenue at 1,220.7 million, while its profit before tax rose by 26% at £290.7 million. The forward sales position of the company stands at £1.70 billion.
Berkeley Group Holdings Plc’s current market cap stands at £5,338.28 million as of 7 January 2022
Taylor Wimpey Plc (LON: TW)
The company operates in the residential property space and has operations in the UK and Spain. In its most recent business update, the company reported robust demand for its inventory resulting in a total order book of £2.8 billion, representing pre-booking of close to 10,643 homes as of 8 November 2021.
Amid positive business performance, the company is on track to deliver its full-year guidance. The business is on track to deliver an operating margin target of 21-22% in the medium term.
Taylor Wimpey Plc’s current market cap stands at £6,310.24 million as of 7 January 2022.