Focus on 5 FTSE housebuilding stocks as the UK hits record number of homes sold

Summary 

  • Home sales in the UK recorded the highest sale in June 2021, as buyers rushed to complete the deals to benefit from the stamp duty holiday.
  • Stamp-duty holidays led to the surge in demand for houses, and the average home price in the UK rose to £338,447 in the month of June.

The UK recorded the highest level of home sales in June as home buyers rush to complete deals before the full stamp duty holiday expired at the end of June. Homes sales in June 2021 reported a rise of over three times compared to the same month last year when the property market was hit hardest by the Covid-19 pandemic.

As per the estimate of Her Majesty's Revenue & Customs (HMRC), over 198,240 home sales were registered during June, which is 74.1% higher than May 2021 and 219.1% above the June 2020 sales number. The UK government introduced the stamp duty holiday last year to boost the domestic real estate sector, which led to a surge in demand for houses. According to property listing website Rightmove, the average home price in the UK rose by 5.7% at £338,447 in June, on an annual basis.

Let us look at 5 housebuilding stocks that could have been benefitted with record home sales:

Barratt Developments Plc (LON: BDEV)

An FTSE 100 constituent, the company operates the residential and commercial properties business in the United Kingdom.

The company recently announced that it delivered over 17243 homes in the year ended 30 June 2021 and has forward sales of £3,473.5 million. The company management has a positive outlook for the year with substantial net cash, healthy forward sales number, and a strong balance sheet with net cash of around £1,315 million.

Barratt Plc shares trade at GBX 716.80, up by 2.52% on 22 July at 8.46 GMT+1 with a market cap of £7.29 billion. In the last one year, the stock has given 34.38% returns to its shareholders.

Redrow Plc (LON: RDW)

The company focuses on housebuilding activities with a network of 14 operational divisions across the United Kingdom and employs close to 2,300 people. The company’s stock is a constituent of the FTSE 250 Index.

The company delivered 5620 homes during the year 2021 with total group revenue of £1.94 billion and an expected operating margin of above 15.5%. The total order book stands at £1.43 billion as of 27 June 2021, with a net cash balance of £160 million.

Redrow Plc shares trade at GBX 652, up by 2.45% on 22 July at 08.46 GMT+1 with a market cap of £2.28 billion. In the last one year, the stock has given 39.95% returns to its shareholders.

Persimmon Plc (LON: PSN)

The company offers residential properties under the Persimmon Homes brand. The company’s stock is a constituent of the blue-chip FTSE 100 Index.

The company delivered 7,406 new homes to its customers during the first half of 2021 with total revenue of £1.84 billion and forward sales of £1.82 billion, with an average selling price of new homes up by 3.3% at £250,350. The company expects to deliver a similar number of home completions in the second half of the year.

Shares of Persimmon Plc trades at GBX 2929, down by 2.72% on 22 July at 08.50 GMT+1 with a market cap of £9.36 billion. The stock has given 15.87% returns to its shareholders in the last one year.

Bellway Plc (LON: BWY)

The company has been in the house building business for the last 75 years. Bellway focuses on combining decades of expertise to deliver personalised experience to its homebuyers.

Bellway Plc made a record investment in the land with 15,982 plots contracted since the start of August 2020, which will help drive the company’s future growth. During the period 1 February to 6 June 2021, the reported forward sales were up by 20.5% at £1,889 million with net cash of £408 million. Now the average selling price is likely to be over £300,000 for the full year.

Bellway Plc shares trade at GBX 3,335, up by 1.86% on 22 July at 8.36 GMT+1 with a market cap of £4.12 billion. In the last one year, the stock has given 25.51% returns to its shareholders.

Countryside Properties Plc (LON: CSP)

The company operates in housebuilding and redevelopment projects in the United Kingdom. The company stock was listed on London Stock Exchange in February 2016 and currently is a constituent of the FTSE 250 Index.

The company completed 1096 homes during the third quarter of 2021, a significant increase of 144% compared to Q3 of 2020 (Q3 2020: 449 homes). The company’s forward order book stands at £1.2 billion with active operations at 114 sites, and its net debt stands at £33.2 million (Q3 2020: £232.1m).

Shares of Countryside Plc trades at GBX 524.5, up by 0.19% on 22 July at 9.13 GMT+1 with a market cap of £2.75 billion. The stock has given 44.41% returns to its shareholders in the last one year.

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