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Highlights:
- High inflation and interest rates are still unable to quell the demand for property in the capital London.
- House prices in London are expected to increase by another £27,000 by the end of 2022.
The British property market is showcasing signs of a cooldown. House prices have seen significant growth in recent months. Besides, rising inflation and interest rates are forcing many to postpone their plans to buy a home. These price hikes are more significant in major cities and are estimated to see another hike soon. However, these factors cannot quell the demand for property in the capital London.
According to data from real estate agent Benham and Reeves, house prices in the capital are projected to rise by another £27,000 by the end of 2022. Area-wise, an average rise of £68,103 will be seen in Kensington and Chelsea, followed by £47,222 in Westminster. The average increase in the City of London is estimated to be £41,519.
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Across the UK, average house prices are set to increase by 5%. On the other hand, property firm Savills expects a rise in the value of premium homes in London as homebuyers in the higher-income group are less exposed to rising interest rates or inflation.
In the wake of this news, Kalkine Media® explores three real-estate stocks that investors can look at.
Persimmon Plc (LON: PSN)
Persimmon is a housebuilding business and a constituent of the FTSE 100 index. With a market cap of £4,713.13 million, shares of the company were trading 1.08% lower at GBX 1,460.00 as of 9:48 am GMT+1 on Thursday. Over the past 52 weeks, the share value has depreciated by more than half, and the five-year return stands in the negative territory at -44%. The stock currently has an EPS of 2.47.
Taylor Wimpey Plc (LON: TW.)
Taylor Wimpey is a British home construction business. Its shares slipped 2.22% to GBX 105.90 as of 9:51 am GMT+1 on 1 September. It posted a revenue of £2,076.8 million in the six months to 3 July 2022, a 5% fall over the same period last year. Over the past 52 weeks, the share value has witnessed a dip by over 42%. Taylor Whimpey has a market cap of £3,825.14 million.
Grainger Plc (LON: GRI)
The British property business provides residential homes across the country. GRI holds a market cap of £1,988.19 million, and its one-year return stood at -18.35%. The EPS is 0.16. As of 9:58 am GMT+1 on Thursday, shares of the company traded at GBX 260.20, down nearly 3%.
Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
