Income investors, here are 3 housing stocks to buy

HIGHLIGHTS

• Rightmove reported a 58% year-on-year rise in revenues from £94.8 million in H1 2020 to £149.9 million in H1 2020.
• Savills announced an interim dividend of 6.0 pence per share to shareholders for H1 2021.
• Barratt Developments’ total forward sales of 15,393 homes as of 10 October 2021 were valued at £3,936.6 million.

About 550,000 homes in the UK are estimated to be in the sales process at present. According to Rightmove, this was, however, lower than 700,000 home sales in June, when homebuyers rushed to gain the maximum discounts available under the stamp duty holiday, which was tapered from July and ended entirely in October.

Three Housing Stocks to Buy for Income Investors

The average time for entering a sale agreement until the purchase gets completed, reduced to an average of 127 days in October from 154 days in July. December is forecast to register higher conveyancing, as people hope to celebrate the festive season in their new homes. Many people have been shifting to larger houses leveraged from the stamp duty holidays.

Below is a detailed review of the investment prospect in three housing stocks – Rightmove, Savills & Barratt Developments.

(Data source: Company release) 

Rightmove Plc (LON: RMV)

Rightmove is UK’s leading property rental website. The company’s property rental platform generated an average of more than 1.7 billion minutes/month and a total of 1.4 billion site visits in H1 2021, representing an increase of 56% year-on-year. 

The shares of Rightmove closed at GBX 694.20, up by 0.40% on Monday, 1 November 2021, with a market cap of £5,889.05 million. In the last one year, the shares of Rightmove returned 12.15% to shareholders.

Rightmove reported a 58% year-on-year rise in revenues from £94.8 million in H1 2020 to £149.9 million in H1 2020. Its underlying profits rose by 86% year-on-year to £114.9 million in H1 2021 from £61.7 million in H1 2020.

Rightmove announced an interim dividend of 3.0 pence per share to shareholders for H1 2021.

Savills Plc (LON: SVS)

Savills is an international real estate services company that operates through a network of over 35,000 people in more than 600 offices located across Europe, the Americas, the Middle East and Africa, and the Asia Pacific.

The shares of Savills closed at GBX 1,414.00, down by 0.28% on Monday, 1 November 2021, with a market cap of £2,028.91 million. In the last one year, the shares of Savills returned 70.05% to shareholders.

Savills recorded group revenue of £932.6 million in H1 2021, representing an increase of £141.2 million or 18% year-on-year compared to £791.4 million in H1 2020. The group’s profit before tax stood at £63.8 million in H1 2021 compared to £7.7 million in H1 2020.

Savills announced an interim dividend of 6.0 pence per share to shareholders for H1 2021.

Barratt Developments Plc (LON: BDEV)

Barratt Developments is a leading residential property development firm that operates across Scotland, England, and Wales. Recently, Barratt Developments launched its flagship zero-carbon homes - Z House, developed in collaboration with Lightsource Labs, Eco2Solar, and Octopus Energy.

The shares of Barratt Developments closed at GBX 643.80, down by 2.90% on Monday, 1 November 2021, with a market cap of £6,776.74 million. In the last one year, the shares of Savills returned 33.43% to shareholders.

Barratt Developments’ total forward sales of 15,393 homes as of 10 October 2021 were valued at £3,936.6 million, compared to 15,135 homes as of 11 October 2020 valued at £3,647.6 million. The company’s average net private reservations per week were 281 compared to 288 in the previous year.

For the financial year 2021, Barratt reported a pre-tax profit of £812.2 million compared to £491.8 million in the previous year.

Barratt Developments announced an interim dividend of 7.5 pence per share and a final dividend of 21.9 pence per share.