UK HPI rose in August by 2.9%. Should you buy these 3 housing stocks?

Highlights

  • The UK house price index data for August 2021 showed a 2.9% month-on-month rise in prices, while the average house price in the UK stood at £264,244.
  • The demand for new homes remains strong post the Covid-19 pandemic as many people moved to larger homes due to work from home scenarios.

The housing market in the UK continues to witness high demand from the customer as per new official figures. The UK House Price Index (HPI) data for August 2021 showed a 2.9% month-on-month rise in housing prices, while the average house price in the UK stood at £264,244. On an annual basis, property prices in the UK rose by 10.6%.

The demand for new homes remains strong post the Covid-19 pandemic as many people moved to larger homes due to work from home requirements. Also, the shortage of houses for sale in the UK pushed the prices upward.

The housing sector is one of the crucial sectors in the economy as it provides jobs opportunities and supports other small and medium businesses in the country. The companies from the housing sector have witnessed high consumer demand in the last one year resulting in revenue growth and profitability for the housing sector companies.

Let us deep dive, into investment prospects of 3 FTSE listed housing stocks:

Barratt Developments Plc (LON: BDEV)

FTSE100 listed company is one of the largest housebuilders in the UK. It acquires land, builds quality homes, and sells its inventory through its various brands. The company is also involved in commercial property development.

The company continues to witness strong demand for new homes from the buyer. It launched 27 new development projects and operated on 338 active sites in the first quarter of the new financial year. Also, the company delivered 3,699 homes to buyers during the period. In addition, the forward sales of the company stood at 15,393 homes valued at £3,936.6 million. The company has a positive outlook for the new financial year and expects to deliver high growth in profits and revenue.

Barratt Developments Plc is currently trading at GBX 670.00, down by 1.44% at 15:13 PM BST. The company’s market cap stands at £6,950 million as of 20 October 2021. In the last one year, the stock has given a 24.91% return to its shareholders.

Taylor Wimpey Plc (LON: TW.)

The company operates as a residential property developer offering homes and communities to its customers.

During the half-year ended 4 July 2021, the company completed 7,303 homes and reported revenue of £2,196.3 million, with an operating profit of £424 million. The company reported a considerable rise in the revenue during the period mainly due to high demand for homes. At present, the company’s total order book stands at 10,344 homes valued at £2,608 million, which indicates strong momentum for the company in the second half of the year.

Taylor Wimpey Plc is currently trading at GBX 155.80, down by 0.51% at 15:15 PM BST. The company’s market cap stands at £5,710 million as of 20 October 2021. In the last one year, the stock has given a 32.95% return to its shareholders.

Vistry Group Plc (LON: VTY)

The company develops residential properties in the UK. It offers homes of all sizes, including two bedrooms, to larger family homes. It sells homes under Linden and Bovis brand names.

The company reported a 91% rise in adjusted revenue at £1,259.4 million, while its operating profit was at £175.5 million in the first half of 2021. It delivered 5,351 homes to its buyer and continues to witness strong consumer demand with a forward order book valued at around £890 million.

Vistry Group Plc is currently trading at GBX 1,206.50, down by 1.15% at 15:17 PM BST. The company’s market cap stands at £2,713.12 million as of 20 October 2021. In the last one year, the stock has given 108.83% returns to its shareholders.

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