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Highlights
- In March 2022, the UK house prices have shown the fastest annual growth since 2004 due to high demand and limited supply.
- Annual house prices rose by 14.3% in the year to March, from 12.6% in February, posting its eighth consecutive monthly increase.
In March 2022, the UK house prices have shown the fastest annual growth since 2004 due to high demand and limited supply. An average home price is now one-fifth times higher than its pre-pandemic levels as inflation is at a record high in the country.
According to the UK’s largest building society, Nationwide, house prices rose by 14.3% in the year to March, from 12.6% in February, posting its eighth consecutive monthly increase. The typical UK home hit the price of £265,312, up by around £33,000 than March 2021 levels, with prices jumping by 1.1% in March alone, beating expectations.
Single unit property prices rose by 22% or around £68,000 as people working from home were in search of bigger houses. At the same time, there was a surge of £24,000 in average flat prices since the start of the pandemic.
Government wage support schemes, stamp duty cuts, and savings during lockdowns have supported the UK housing market and helped in pushing house prices. At the same time, the tight labour market also supported the housing price rise.
Let us look at three FTSE-listed housing stocks that can be considered amid the surge in housing prices.
Taylor Wimpey Plc (LON: TW.)
One of the largest home construction companies, Taylor Wimpey Plc, is a residential developer primarily operating in UK and Spain. The company has reported an increase in operating profit to £828.6 million in FY2021, up from £300.3 million in FY2020, and its profit before tax increased to £679.6 million in FY2021, up from £264.4 million in FY2020.
With a market cap of £4,745.79 million, the FTSE 100-listed house developer’s share price has depreciated by 26.43% over the last one year as of 1 April 2022.
Taylor Wimpey Plc’s shares were trading at GBX132.60, up by 1.45%, at 8:05 AM (GMT) on 1 April 2022.
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Persimmon Plc (LON: PSN)
The British housebuilding company Persimmon Plc is engaged in constructing houses ranging from as high as executive family homes to small studio apartments. The company has reported an increase in total group revenue to £3.61 billion in FY2021, from £3.33 billion in FY2020. Meanwhile, its new housing revenue increased to £3.45 billion in FY2021, from £3.13 billion in FY2020. Its profit after tax stood at £966.8 million, up from £783.8 million in FY2020.
With a market cap of £6,866.50 million, the FTSE 100-listed house developer’s share price has depreciated by 25.65% over the last one year as of 1 April 2022. Persimmon Plc’s shares were trading at GBX2,180.00, up by 1.44%, at 8:05 PM (GMT) on 1 April 2022.
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Redrow Plc (LON: RDW)
Redrow Plc is one of the largest housebuilding companies with a network of 14 operational divisions across the UK. The company has reported, an increase in revenue to £1,052 million in H1 2022, as compared to £1,041 million in the same period of 2021. Its profit before tax stood at £203 million, up from £174 million in the same period of 2021.
With a market cap of £1,841.25 million, the FTSE 250-listed house developer’s share price has depreciated by 15.53% over the last one year as of 1 April 2022. Redrow Plc’s shares were trading at GBX528.50, up by 1.09%, at 8:05 AM (GMT) on 1 April 2022.
Note: The above content constitutes a very preliminary observation or view based on market 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.
