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Highlights
- House prices in the UK are anticipated to go down by 4.5% on average next year, as per Cebr.
- Next year will probably be a tough year for Britain's housing segment, with a 6.2% peak yearly contraction projected in the third quarter.
- The Cebr has predicted that housing will remain unaffordable for "generation rent" despite falling house prices.
House prices in the UK are anticipated to go down by 4.5% on average next year, new data has revealed. However, young buyers might not be able to afford the properties despite the price fall. As per the latest figures released by the Centre for Economics and Business Research (Cebr), 2023 will probably be a tough year for Britain's housing segment, with a 6.2% peak yearly contraction projected in the third quarter.
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This comes amid the escalating cost of living tensions, swiftly rising mortgage rates, fears of recession looming over the economy, and an expected surge in unemployment. The Cebr has claimed that despite households and businesses feeling a sense of relief due to the recently announced energy price cap, the above-mentioned forces would still have a negative impact on the economy for at least another year.
The Cebr has predicted that housing will remain unaffordable for "generation rent" despite falling house prices and that there would be no reduction in inequality. Contraction in the housing market will potentially impact all segments of the economy as property makes up for a significant portion o national wealth.
As house prices decline, UK investors can evaluate the performance of the following real estate stocks.
Empiric Student Property plc (LON: ESP)
The Real Estate Investment Trust (REIT) market cap investing in premium student accommodations, ESP, stands at £594.90 million as of Wednesday. Enjoying a low P/E ratio of 6.31, the company has a positive EPS (earning per share) of 0.05. On a YTD basis, the REIT's return stands at 12.44% as of 21 September. Meanwhile, its return on a one-year basis stands at 5.45%, and its annual dividend yield stands at 1.7%. ESP shares were trading at GBX 96.70 on Wednesday morning as the market opened at 8:00 AM (GMT+1).
Starwood European Real Estate Finance Ltd (LON: SWEF)
The market cap of the closed-ended investment firm servicing commercial real estate debt, Starwood European Real Estate Finance Ltd, stands at £388.96 million as of Wednesday. Having a P/E ratio of 18.39, the company has a positive EPS of 0.07. On a YTD basis, the firm's return stands at 2.64% as of 21 September. Meanwhile, its return on a one-year basis stands at -2.94%, and its annual dividend yield stands at 5.6%. SWEF shares were trading at GBX 97.60 on Wednesday morning as the market opened at 8:00 AM (GMT+1).
Capital & Regional plc (LON:CAL)
The market cap of the UK property REIT focused on community shopping centres, Capital & Regional plc, stands at £95.60 million as of Wednesday. Enjoying a low P/E ratio of 2.48, the company has a negative EPS of -0.22. On a YTD basis, the REIT's return stands at -2.96% as of 21 September. Meanwhile, its return on a one-year basis stands at -1.67%, and its annual dividend yield stands at 3.4%. CAL shares were trading at GBX 59.00 on Wednesday morning as the market opened at 8:00 AM (GMT+1).
