- UK housing prices rose by 10.9 per cent to £242,832 in May, touching an almost 7 year high
- The recent boost in the sector was supported by government measures including an extension of stamp duty holiday and new mortgage guarantee scheme amongst others.
- About 33 per cent of property buyers sought new homes in a different area
In a clear indication to UK housing sector going through a mini boom, housing prices rose by a sharp 10.9 per cent to £242,832 in May, reaching the highest growth rate in almost seven years, according to data released by mortgage lender Nationwide.
Housing prices had risen by 1.8 per cent in April. The real estate sector was also supported by several government measures announced in the March budget, such as extending the stamp holiday deadline to the end of June 2021. And by a new mortgage guarantee scheme, which allowed people with only 5 per cent of the deposit amount to also buy property.
However, the extension of the stamp duty holiday will eventually taper by the end of September before resuming original rates. The sector is still expected to grow further, boosted by people searching for new homes after the pandemic.
According to Nationwide, about 33 per cent of those people considering moving planned to move to a different area. And, about 30 per cent also planned on moving to a place with easy access to a garden or outdoor space.
Let’s take a look at the performance of two FTSE listed real estate stocks:
- Savills PLC (LON: SVS)
Savills is a globally leading property advisor, which is listed on the FTSE 250 index. The company announced today that it had issued share capital of 143,074,055 ordinary shares with voting rights, priced at 2.5 pence per share.
(Image Source: Refinitiv)
SVS’ shares were trading at GBX 1,208.00, up by 1.77 per cent, while the FTSE 250 index stood at 22,865.97, up by 0.80 per cent on 1 June at 09:39 AM GMT+1. The company’s market cap was at £1.698 billion, and its five-year average dividend yield was at 2.3 per cent.
- Rightmove PLC (LON: RMV)
FTSE 100 listed property major Rightmove had announced a 29 per cent drop in its revenue for the year ended 31 December 2021. But the company witnessed robust traffic growth of 31 per cent; most importantly, more than one million UK residential properties were advertised on Rightmove, leaving behind the competitors with a wide margin.
(Image Source: Refinitiv)
RMV’s shares were trading at GBX 610.80, up by 1.29 per cent, while the FTSE 100 index stood at 7,104.09, up by 1.16 per cent on 1 June at 09:47 AM GMT+1. The company’s market cap was at £5.195 billion, and its five-year average dividend yield was at 1 per cent.