Redrow, Bellway, Cairn Homes: Stocks you may buy with rising house prices

Highlights

• The average prices of homes across the UK have surged by around £7,800 in February, which is the biggest month-on-month increase in over 20 years, as per Rightmove.

• The average asking price for homes increased by 9.5% from the last year, which is the highest annual growth since September 2014.

The housing sector in the United Kingdom is setting new records every month. The average prices of homes across the UK have been plummeted by around £7,800 in February, which is the biggest month-on-month increase in cash terms in over 20 years of its reporting by the property website Rightmove.

It means that the average asking price of homes now stands at a record £348,804, amid squeezing household budget and increasing living costs, such as food, energy, and fuel. It is £40,000 higher than its pre-pandemic level, compared to only £9,000 in the last two years.

The property website said the average asking price for home increased by 9.5% from the past year, which is the highest yearly growth in the last 8 years (September 2014). The data shows a widening gap between the supply and demand of the property, which could lead to bidding wars. The February growth is driven by the second stepper sector, which consists of buyers who are now ready to move on from their first homes and who need more space. This is because home buyers are coming back to city centre locations in numbers as Omicron restrictions are being eased.

According to Rightmove, first-time buyers may have to struggle to look for perfect properties as the demand is high, while wealthier buyers may be caught by the fear of missing out, which will further drive prices up in the coming months. As workers are returning to offices, London properties saw a jump of around 24% year-on-year in inquiries and had its highest annual rate of price growth in the last five years, which had stagnated after the Brexit vote in 2016.

Let’s take a look at 5 FTSE housing stocks, which may be impacted by rising property prices.

1.     Cairn Homes Plc (LON: CRN)

Cairn Homes Plc is an Irish housebuilder and developer that is engaged in acquiring Greenfield or brownfield sites in Ireland that are suitable for residential development. Cairn Homes Plc’s shares were trading at GBX 102.40, up by 0.39%, at 8:05 AM (BST) on 21 February 2022, with the market cap of £749.32 million. 

Also Read: UK housing market hits new high in Jan: 5 stocks to watch out for

2.     Vistry Group Plc (LON: VTY)

FTSE 250 constituent Vistry Group Plc is a developer of sustainable new homes and communities across all sectors of the UK housing market. The company is engaged in both private customers and registered social landlords. Vistry Group Plc’s shares were trading at GBX 1,017, up by 0.79%, at 8:05 AM (BST) on 21 February 2022, with the market cap of £2,243.07 million. 

3.     Redrow Plc (LON: RDW)

FTSE 250 constituent Redrow Plc is one of the largest housebuilders with a focus on constructing homes in England and Wales. Redrow Plc’s shares were trading at GBX 605, up by 0.30%, at 8:05 AM (BST) on 21 February 2022, with the market cap of £2,429.66 million. 

4.     Springfield Properties Plc (LON: SPR)

Springfield Properties Plc is a FTSE AIM All-Share listed housing development company, with a focus on the development of a combination of private and affordable housing in Scotland. Springfield Properties Plc’s shares were trading at GBX 150, at 8:05 AM (BST) on 21 February 2022, with the market cap of £177.45 million. 

Also Read: 5 energy supplier stocks you may watch amid soaring gas prices

5.     Bellway Plc (LON: BWY)

Bellway Plc is a house and residential properties developer with operations spread across 19 trading divisions in Scotland, England, and Wales. The company builds one-room to six-room houses, apartments, penthouse, and residential properties. The FTSE 250 constituent’s shares were trading at GBX 2,971, up by 1.19%, at 8:05 AM (BST) on 21 February 2022, with the market cap of £3,623 million. 

Note: The above content constitutes a very preliminary observation or view based on industry 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.