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Highlights
- Residential transactions in the UK surged by 32% in August month as compared to the previous month.
- Preference for bigger homes due to the work from home scenario and low mortgage rate in the UK market have helped sustain the housing demand despite the end of stamp duty holiday.
- 3 FTSE 250 listed companies Redrow Plc, Bellway Plc and Countryside Properties Plc, have performed well.
Housing transactions in the UK reported a surprise surge in August 2021, despite no stamp duty holiday. As per data announced by the HM Revenue and Customs (HMRC), the seasonally adjusted residential transaction was at 98,300 in August, which is 32% higher than July 2021 and 20.8% higher than August 2020. Preference for bigger homes due to work from home scenario and low mortgage rate in the UK market has helped sustain the housing demand and rise of real estate properties in the UK market.
As per market experts, the UK housing market boom is expected to continue for the next few years due to changes in individual preference after the pandemic, pent-up demand, and low interest rates. Thus, investment in FTSE-listed real estate stocks might prove to be the right choice for investors in the long run.
© 2021 Kalkine Media
Here we will discuss 3 home construction companies listed on the mid-cap focused FTSE 250 and explore their prospects:
Redrow Plc (LON: RDW)
The company is one of the largest housebuilders in the UK, focused on the development of residential properties. It employs 2,300 people.
Redrow Plc reported revenue of £1.94 billion and delivered 5,620 legal completions in the financial year ended 27 June 2021. As a result, the company’s profit before tax rose by 124% at £314 million, while its earnings per share were at 73.7p per share, up by 124%. The company has a positive outlook for the next year with a revenue expectation of above £2.2 billion as the company is making a substantial investment in new projects. Also, the company’s forward order book stands at £1.43 billion.
Redrow Plc’s current market cap stands at £2,494 million as of 21 September 2021. In the last one year, the stock has given a 69.87% return to its shareholders.
Bellway Plc (LON: BWY)
The company sells its housing inventory under Bellway and Ashberry brands. It focuses on residential apartments and also provides homes to the housing associations for social housing.
The company reported strong demand for its residential properties, and it delivered 10,138 homes to buyers during the year ended 31 July 2021. As a result, the company generated revenue of over £3.1 billion, a rise of 41% during the period. Also, it has a strong forward order book of 7,082 homes at a value of £2,022.3 million, which could help its revenue growth and profitability.
Bellway Plc’s current market cap stands at £4,242 million as of 21 September 2021. In the last one year, the stock has given a 49.5% return to its shareholders.
Countryside Properties Plc (LON: CSP)
The company specialise in the urban redevelopment of public sector land to deliver affordable homes in partnership with local authorities.
The company delivered a total of 1,096 homes to buyers in the third quarter ended on 30 June 2021, generating revenue of £287 million (Q3 2020: £101 million). The company has significantly reduced its net debt to £33.2 million (Q3 2020: £232.1 million) and has kept its full-year guidance unchanged.
Countryside Properties Plc’s current market cap stands at £2,693 million as of 21 September 2021. In the last one year, the stock has given a 52.79% return to its shareholders.
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Tags: Countryside Properties Plc, Bellway Plc, Redrow Plc, UK housing market
