UK house prices in May fell by the most in more than a decade, according to the latest Nationwide survey. Investors gave a mixed reaction to this news with shares in estate agents rising and housebuilders falling.
Important to the market is the easing of lockdown restrictions and getting people back to work and children back to school, as these signal a resumption of life as we know it. With both factors now in play, investors appear to be taking the view that any dip in the property market is only a short-term issue, as evident by shares in estate agent Countrywide rising 3.1% on the Nationwide survey news.
The building societyโs survey noted that would-be buyers were planning to wait six months on average before looking to make a housing transaction.
โOn one hand, that isnโt a long period to wait from a stock market perspective as investors are now increasingly focused on 2021 earnings,” according to AJ Bell.
โEstate agents typically benefit from having lettings business which should be relatively unaffected by the pandemic and which provides some earnings support while they wait for housing transactions to pick up.
โHousebuilders, on the other hand, will not welcome the prospect of would-be buyers waiting until next year which might explain why their shares are weaker on the back of the Nationwide survey.โ
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