HWG, SAFE- Housing stocks to consider amid skyrocketing rents

Highlights

• Rents in London have now hit a record-high asking price of £2,257 a month over the quarter, as per Rightmove.
• Even outside of London, the average asking rents have been surging, hitting £1,126 per month.
• The 3.5% hike in this quarter is the second greatest quarterly rise over a decade.

Average asking prices in the UK have been hitting the roof. According to the UK’s leading online property site Rightmove, rents in London have now hit a record-high asking price of £2,257 a month over the quarter. Even outside of London, the average asking rents have been surging, hitting £1,126 per calendar month on average. As compared to the last quarter, asking rents have gone up by 3.5%, while comparing with last year's figures, they have gone up by a whopping 11.8%.

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Over the past 16 years of Rightmove’s reporting, the average asking rents outside of London have not risen at this level of annual growth rate. Since the Covid-19 pandemic, there has been an increase of 19% or £177 in rents. On the contrary, the increase in rents has been astounding as it took eight years prior to Covid to reach the same growth level. This shows the swift upsurge in asking rents since the pandemic hit the UK housing market.

The 3.5% hike in this quarter is the second greatest quarterly rise over a decade. According to Chestertons’ managing director Richard Davies, the rental market of London has been witnessing a surge in tenant enquiries and extensions in rental agreements over the second quarter. Amid the escalating cost-of-living crisis, those who got properties at discounted rental rates in the pandemic want to stick to this deal for the maximum possible time.

Amid this, the UK investors can keep an eye on these 3 housing stocks.

Harworth Group plc (LON: HWG)

The Harworth Group plc were experiencing gains of 0.35% at around 1:30 PM (GMT+1) on 14 July and were trading at GBX 142.50. HWG's market cap of the company stood at £458.64m and is offering a dividend yield of 0.8% a year to investors. The company has given positive returns to its shareholders over the past over year and has provided them with an annual return of 2.09% as of 14 July. However, its YTD return lies in the negative zone, at -21.17%. It has an EPS of 0.08.

Safestore Holdings Plc (LON: SAFE)

The shares of the self-storage firm, Safestore Holding plc, were experiencing a dip of 1.77% at around 1:30 PM (GMT+1) on 14 July and were trading at GBX 1,056.00. As of 14 July, the market cap of the company stands at £2,266.39m and is offering a dividend yield of 2.0% a year to investors. The company has given positive returns to its shareholders over the past over year and has provided them with an annual return of 1.93% as of 14 July. However, its YTD return lies in the negative zone, at -25.05%. It has an EPS of 1.81.