AUS
NZ
UK
CA
USA
IND
Highlights:
- The average house prices saw the steepest fall in November since June 2020.
- Across the UK, the growth in house prices slowed to 4.4% annually.
Amid soaring inflation and rising interest rates, the housing market has been witnessing a slowdown for the past few months. As mortgage rates directly depend on the interest rates set by the Bank of England, people have been postponing their plans to buy a house. The real estate sector's price growth has also slowed after seeing a steep increase in the first half of this year.
In fact, the average house prices saw the steepest fall in November since June 2020, the early period of the COVID-19 pandemic.
©2022 Kalkine Media®
According to an index, the average house price fell by 1.4% on a month-on-basis in November, making it the biggest drop in more than two years. Across the UK, the growth in house prices slowed to 4.4% annually from 7.2% in October. According to the Nationwide Building Society, the average house price in November was recorded at £263,788.
Notably, mortgage rates saw a steep jump after September's mini-budget, as anticipations of an aggressive hike in interest rates grew stronger. The Bank of England raised interest rates to 3% at the beginning of last month, and further rises are not off the table.
After the new chancellor reversed most of the announcements made in the mini-budget, mortgage rates started to come down. Experts say that they should keep moving downwards in the coming months.
Let's explore some real estate stocks listed on the London Stock Exchange in the wake of the latest data on house prices.
Rightmove Plc (LON: RMV)
Rightmove operates an online real estate portal. The company belongs to the FTSE 100 index, holding a market cap of £4,572.34 million. The EPS (earnings per share) stands at 0.21 as of 1 December. Over the past 12 months, Rightmove's share price has tumbled over 24%. Shares of the company were trading at GBX 567.50, up 2.57% as of 8:04 am GMT on Thursday.
Grainger Plc (LON: GRI)
Grainger is a listed real estate landlord, also the largest in the UK. It is listed on the FTSE 250 index and has a market cap of £1,798.67 million as of 1 December. The company's EPS currently stands at 0.16, and its share value has depreciated by 16.72% in the past year. GRI shares were up 2.64% and traded at GBX 249.00 as of 8:08 am GMT on Thursday.
Vistry Group Plc (LON: VTY)
Vistry Group is a real estate developer and belongs to the FTSE 250 index. As of 1 December, the group enjoys a market cap of £2,139.94 million and an EPS of 1.15. Its share value has fallen by more than 41% in the past year and by more than 46% on a year-to-date basis. Shares of the company were trading at GBX 637.00, up 2.91% as of 8:10 am GMT on Thursday.
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.
