Spotlight On 3 FTSE 250 Real Estate Stocks as March Sees Strongest Mortgage Borrowing

Summary

  • Net mortgage borrowing in the month of March was the strongest since 1993, at £11.8 billion.
  • Mortgage approvals for buying a house was at 82,700, up from 73,000 in February.
  • The housing market was primarily driven by homebuyers from higher income groups

UK’s net mortgage borrowing in the month of March was the strongest since 1993, data by the Bank of England showed. It stood at £11.8 billion in March. Mortgage approvals for buying a house was at 82,700, up from 73,000 in February. It was, however, lower than the high of 103,100 seen in November.

The Bank of England report also said consumers made net repayments for credit worth £0.5 billion in March. Households deposited £16.2 billion more in the month of March. Interest rates on deposits were at historically low levels.

According to experts, the housing market was primarily driven by homebuyers from higher income groups who managed to escape job losses during the Covid-19 pandemic. They also said that the Bank of England’s low interest rates helped to fuel the surge seen in mortgage borrowing.

Here’s a look at 3 biggest FTSE 250 real estate investment and services stocks by market capitalisation:

Grainger Plc (LON: GRI)

The company’s like-for-like rental growth for the first four months till January was at +2.4 per cent. It reported a rent collection of 98 per cent for the period. The company’s residential rent arrears were low at 1.9 per cent, while its sales performance remained strong across all regions. It maintained a robust forward-looking sales pipeline, and the company also said it was on track for a strong sales performance this year.

Also read: 3 Property Sector Gainers in Focus as UK House Prices Dip in March

The company had a market capitalisation of £1,924.40 million. The shares of the company were trading at GBX 288.40, up by 0.07 per cent on 5 May at 13:53 GMT+1. Meanwhile, the FTSE 250 was up 0.18 per cent at 22,370.45.

Savills Plc (LON: SVS)

For the full year ended 31 December 2020, the company reported a 9 per cent drop in revenue to £1.74 billion compared to £1.91 billion in the previous year. Its profit for the year fell to £68 million from £83.6 million of last year.

The company’s CEO Mark Ridley said the company was confident of real estate’s attraction as a long-term asset class, and despite the uncertainties, the company sees increased demand in leasing activities.

Also read: Focus On 3 REITS Stocks as Study Predicts Property Market to Face Supply Crunch

The shares of the company, with a market capitalisation of £1,709.73 million, were trading at GBX 1,179, down by 0.51 per cent on 5 May at 14:06 GMT+1.

Sirius Real Estate (LON: SRE)

For the year ended 31 March, the company reported a 7.6 per cent growth in annualised rent roll to €97.2 million, up from €90.3 million a year ago. The company reported an increase in total occupancy to 87 per cent compared to 85.3 per cent a year ago. The total rental rate per square metre increased to €6.17 million compared to €5.98 million a year ago.

Also read: Will NZ Government Succeed In Putting The Brakes On Rising House Prices?

Its shares were trading at GBX 97.80, down by 2.40 per cent on 5 May at 14:32 GMT+1. The stock holds a market capitalisation of £1,069.66 million.

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