SAFE, HWG: Stocks to eye as UK house prices hit the roof

Highlights 

• The average house prices have surged by 12.8% to May on yearly basis, up from 11.9% in April, as per ONS.
• As compared to May 2021, the price of an average UK home was £32,000 higher in May this year, standing at £283,000.
• The lowest yearly price growth rate in the UK is still being witnessed in London.

UK house prices have been skyrocketing lately. The price of an average UK home has surged by 1.2% between April and May. According to the latest figures published by the Office for National Statistics (ONS), the average house prices have surged by 12.8% to May on yearly basis, up from 11.9% in April.

As compared to May 2021, the price of an average UK home was £32,000 higher in May this year, standing at £283,000. Over the year, the average house prices have rapidly escalated in the UK, increasing by 13.1%, 14.4%, 11.2%, and 10.4% in England, Wales, Scotland, and Northern Ireland, respectively.

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The lowest yearly growth rate is still being witnessed in the capital itself. While London saw an increase of just 8.2% since May 2021, Southwest, East Midlands, and East of England witnessed an annual growth rate of 16.9%, 15.2%, and 14.8%, respectively.

The UK housing market has been booming since the country was hit by the pandemic. In the second half of 2020, house prices started rocketing. This same trend was observed in 2021, and the growth in house prices continues to be robust this year as well.

According to property website Rightmove, the asking price for UK homes this month was 9.3% higher as compared to 2021 but was lower than June’s hike of 9.7%, primarily owing to the sharp increase in mortgage costs for first-time buyers. While house prices have been going up, the overall UK housing market is cooling down amid the cost-of-living squeeze and BoE’s rate hikes.

Considering the trend of increasing prices, UK investors can keep an eye on the following housing stocks.

Safestore Holdings Plc (LON: SAFE)

The shares of the largest British self-storage provider, Safestore Holding plc, were witnessing a surge of 2.20% at around 11:45 AM (GMT+1) on Wednesday and were trading at GBX 1,115.00. The company falls under the FTSE 250 index and currently has a market cap of £2,300.12m. Safestore Holdings is offering its investors an annual dividend yield of 2.0%, with a positive EPS of 1.81. The company has provided its shareholders with an annual return of 10.50% as of 20 July, but its YTD return lies in the negative zone, at -20.94%.

Harworth Group plc (LON: HWG)

Harworth Group plc was witnessing a positive up trend of 5.95% at around 11:50 AM (GMT+1) on Wednesday and its shares were trading at GBX 160.00. The British land and property regenerator’s market cap stood at £487.71m. Harworth Group is offering its investors an annual dividend yield of 0.8%, with a positive EPS of 0.08. The company has provided its shareholders with an annual return of 8.84% as of 20 July, but its YTD return lies in the negative zone, at -11.11%.