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

by Scarlett S. Stock Market Analyst

The growth in UK house prices has slowed by more than expected in March this year, according to Nationwide’s latest house price index survey. The popular survey from the world’s largest building society said that the residential property prices were down 0.2 per cent on a month-on-month basis for March. In contrast, the house price index grew by 0.7 per for the month of February.

Robert Gardner, chief economist, Nationwide said that the annual house price growth slowed to 5.7 per cent for March, down from a value of 6.9 per cent recorded for February. This slowdown in home prices probably reflects a temporary fall in demand, he said.

Given the stimulus measures announced in the budget such as extension of stamp duty holiday and the furlough scheme along with introduction of the mortgage guarantee scheme, housing market activity is likely to remain resilient during the next six months or so, added Gardner.

However, the UK housing sector’s long-term outlook was uncertain and if the policy support gets withdrawn towards the end of this year, the housing activity could shrink, he opined.

Mixed regional picture

London witnessed the weakest growth across Britain in the first quarter this year, displaying a home price growth of 4.8 per cent, revealed the survey report. North West saw an 8.2 per cent rise in prices for Q1 2020, the highest regional growth for the period, followed by West Midlands (7.6 per cent growth for Q1).

Let us now glance through three top property stocks listed on the London Stock Exchange.

Grainger Plc

Grainger is residential property developer headquartered in Newcastle. The home builder delivered a like-for-like rental growth of 2.4 per cent for the first four months of its financial year ending on 31 January 2021. Its rent collection remained high at 98 per cent for the same period.

The home builder delivered a net rental income of £73.6 million for FY 2020 ending 30 September, up 16 per cent from the previous financial year’s figures. Its adjusted earnings were £81.8 million for FY2020, down 1 per cent from FY2019. The group maintained paying the dividend and raised it by 5 per cent for the year to 5.47 p.

The GRI stock (market cap £1.82 billion) gained 0.22 per cent to GBX 270.60 at 11.44 AM on 31 March.

St. Modwen Properties Plc

St. Modwen Properties is a Birmingham-based property investment and development firm. According to the company’s results for the year ended 30 November 2020, it delivered a dividend per share of 5.0p (2019: 3.6p). The firm made a loss of £120.8 million for 2020 (profit for 2019: £49.5 million).

The SMP shares were up 0.25 per cent to GBX 405.50 at 11.48 AM on Wednesday, against previous close price of GBX 404.50. The company’s market cap was £0.90 billion at the time of reporting.

Savills Plc

Savillis provides realty services on a global level and is a constituent of the FTSE 250 Index. According to the property advisor’s results for the year ended 31 December 2020, its statutory profit before tax was £83.2 million (2019: £115.6 million). The firm delivered a final ordinary dividend of 17.0 p for the year. SVS shares were up 0.17 per cent today at 11.49 AM in UK trading to reach GBX 1154.00, taking the stock market cap to £1.65 billion.

First Published at Kalkine Media