Real estate stocks to explore as house prices move higher in September

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Real estate stocks to explore as house prices move higher in September

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 Real estate stocks to explore as house prices move higher in September
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Highlights

  • As per Rightmove, the price of an average UK home has increased by £2,587 or 0.7% month-on-month in September.
  • The recent price rise is in line with the average increase of 0.6% in September.
  • Middle and high-end market sectors have been the primary drivers of this month's price rise.

According to a leading property website, the price of an average UK home has increased by £2,587 or 0.7% month-on-month in September. On average, the asking price of an average home bought into the UK market stands at £367,760.

According to Rightmove, the price hike is in line with the average increase of 0.6% in September over the past 10 years. Middle and high-end market sectors have primarily driven the growth in prices this month.

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Last week, the base rate was hiked again by the Bank of England (BoE) from 1.75% to 2.25%. Several mortgage borrowers on variable rates witnessed an increase in their overall costs. Rising mortgage rates have been weighing on housing affordability.

Considering all the latest rate hikes by the BoE, a tracker mortgage is around £210 a month more costly on average than to last December, when the rate hikes had just begun, as per the UK Finance data. The figures revealed that a standard variable rate (SVR) mortgage is around £132 more costly per month.

In Friday's mini budget, a stamp duty cut was announced for people moving homes and buying homes for the first time in England and Northern Ireland. Over the recent months, housing demand has been softening, and this announcement is expected to encourage it, as per a Rightmove housing expert.

While house prices soar, UK investors can assess the performances of these real estate stocks based on their yearly returns.   

CT Property Trust Ltd (LON: CTPT)

The market cap of the real estate investment trust (REIT) mainly focused on long leasehold properties, CT Property Trust Ltd, stands at £186.40 million. On a one-year basis, the company's return stands at 10.31%. Meanwhile, its YTD (year-to-date) return as of 26 September stands at -7.26%. With a low P/E ratio of 2.97, the company's yearly dividend yield offering stands at 4.1%. CTPT shares were trading at GBX 79.20 at 8:10 AM (GMT+1) as the market opened on Monday. 

Palace Capital plc (LON: PCA)

The market cap of the leading regional property focused investment company, Palace Capital plc, stands at £107.87 million. On a one-year basis, the company's return stands at 1.21%. Meanwhile, PCA’s return on a year-to-date basis as of 26 September stands at -6.69%. With a low P/E ratio of 4.62, the company's yearly dividend yield offering stands at 4.3%. PCA shares were trading at GBX 251.00, rallying by 2.45%, at 8:14 AM (GMT+1) as the market opened on Monday.

Custodian REIT Plc (LON: CREI)

The market cap of the REIT engaged in commercial property investments, Custodian REIT Plc, stands at £423.66 million. On a one-year basis, the company's return stands at -0.23%. With a low P/E ratio of 3.38, the company's yearly dividend yield stands at 4.4%. CREI shares were trading at GBX 96.10 at 8:21 AM (GMT+1) as the market opened on Monday.

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