Listed housebuilder shares ended up rising 10% in value in 2021 – despite falling for most of the year and causing the FTSE to slump in the final quarter.
Equities analyst and consultant Alastair Stewart told Property Week that the housebuilder recovery largely took place in December and that it had reversed a year of decline.
“By the year end, it appeared that selling price rises were offsetting margin inputs from rising input costs and the spectre of private equity-led acquisitions started to gather pace.
“The decline during most of the year appears to have been driven by rising input costs, with the assumption that this would squeeze margins, and by concerns that base rates were going to rise,” he said.
There were only moderate changes to most housebuilders’ share prices last year, but Vistry’s acquisition of Bovis Homes helped the company enjoy the largest growth, at 30%.
The company produced positive trading statements and said it expected strong revenue growth going forward.
Redrow and Crest Nicholson also had a strong 2021, increasing their share prices by 24% and 16% respectively.
The one housebuilder to see a fall in share price was Countryside Properties, which moved its entire focus to its housebuilding arm Countryside Partnerships last year.
Stewart said: “This looks a good move in principle, but the proposed execution looked uncertain – they are also alone in the sector in not proposing a final dividend for the latest financial year.”
The strongest-performing REITs in 2021 included self-storage companies, with Safestore up 81% and Big Yellow up 56%.
Miranda Cockburn, managing director, real estate equity research, at Panmure Gordon, said: “Both companies reported strong trading over the year with rapidly rising occupancy levels and, as a result, earnings estimates were upgraded several times during the year.”
Industrial REITs – notably Tritax Big Box,Warehouse REIT, SEGRO and Industrials REIT – also performed well, driven by rising valuations and net asset values.
The weaker performers included some of the safe-haven stocks that performed well in 2020, for example Assura (-9%), PHP (-1%) and Civitas (-8%).