The real estate investment and services sector was on the rise on Thursday on the back of upbeat results from Savills, while homebuilders gained after data showed that house-price inflation rose to seven-year high in July.
Savills, which earns money mainly through transaction fees, consultancy and property management, saw its share price rise 3.6% to 595p in afternoon trade after the company impressed with a 16% rise in underlying pre-tax profit to £30.1m in the first half.
Savills said it even surpassed its own expectations as a result of the strength of key transactional markets in the UK and a recovery in Continental Europe. Elsewhere, while markets in Asia remain subdued, the company expressed its confidence in recent investments in US, where it bought tenant representation and occupier services firm Studley.
"Savills is materially too cheap for such a diversified business which has the potential to benefit very strongly when Asian markets recover," said analysts at Numis who kept a 'buy' rating on the stock.
Industry peers Countrywide and Foxtons were also rising nearly 2% on Thursday.
Meanwhile, housing stocks were continuing to rise after Halifax said on Wednesday that UK house prices rose at an annual rate of 10.2% last month, the highest ever growth recorded since 2007.
Homebuilders Redrow, Barratt Developments, Bovis Homes, Taylor Wimpey and Persimmon were all in demand.
Halifax's data was a marked contrast with other recent surveys that have showed a cooling of house-price growth, with Nationwide showing just a 0.1% month-on-month rise in July and the Land Registry reporting no change for June.
Despite admitting that the Halifax data "adds to the current uncertainty over the true state of the housing market", economist Howard Archer from IHG Global Insight said he expects house prices to continue rising over the coming months. However, he said that growth will still likely slow gradually in the near term.
Top performing sectors so far today
Technology Hardware & Equipment 1,034.27 +1.81%
Software & Computer Services 1,128.11 +1.13%
Household Goods & Home Construction 11,494.59 +1.08%
Chemicals 9,756.68 +0.97%
Real Estate Investment & Services 2,603.93 +0.80%
Bottom performing sectors so far today
Industrial Metals & Mining 1,191.59 -1.93%
Health Care Equipment & Services 5,641.62 -1.22%
Electricity 9,358.03 -1.08%
Pharmaceuticals & Biotechnology 12,357.47 -0.85%
Oil & Gas Producers 8,397.04 -0.67%