These FTSE 100 and real estate shares are on sale! Time to consider buying?

Despite the FTSE’s rise in 2024, many top UK blue-chip shares continue to trade at large discounts. Here are two of my favourites today.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Looking for the best bargain shares to buy? I think these FTSE 100 and real estate shares are worth a close look right now.

Barratt Redrow

Created with Highcharts 11.4.3Barratt Redrow PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Sentiment towards UK housebuilders like Barratt Redrow (LSE:BTRW) has soured since the end of October. Investors are worried about stamp duty changes in the Budget, which could dampen home purchases from first-time buyers and those seeking second homes.

The market’s also been spooked by Donald Trump’s victory in the US Presidential election. A slew of potential trade tariffs could push up inflation, causing interest rates (and mortgage costs along with them) to rise.

Should you invest £1,000 in Barratt Developments right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Barratt Developments made the list?

See the 6 stocks

To cap things off, Thursday’s trading update from Persimmon has ignited fears over builders’ margins. In it, the company said it is seeing “some signs of build cost inflation beginning to emerge“, adding that “new building regulations and the employer national insurance increases announced in the recent Budget” are impacting costs.

Yet I believe these troubles are reflected in Barratt’s sharp price drop, which — at 434p per share –recently touched one-year lows. It’s now a top dip buy to consider in my book.

Firstly, the builder’s shares look dirt cheap relative to expected earnings. Its forward price-to-earnings growth (PEG) ratio is just 0.2, reflecting City forecasts of a 107% profits bounce.

Any reading below one indicates that a share is undervalued.

It’s also worth remembering that the mood music around the UK housing sector remains broadly positive. Barratt’s latest update showed a private reservation rate of 0.67 from 22 August to 13 October, up more than a third from 0.49 a year earlier.

Since then, house price data from Rightmove has shown a market that’s clicking through the gears. Average house prices rose higher than forecast in October, up 4.6% year on year to reach record peaks of £293,999.

With interest rates tipped to continue dropping in 2025, conditions for the likes of Barratt should continue improving sharply.

I already own Barratt shares. And following its recent dip, I’m thinking of adding more.

Schroder European Real Estate Investment Trust

Created with Highcharts 11.4.3Schroder European Real Estate Investment Trust Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

The Schroder European Real Estate Investment Trust (LSE:SERE) is another top UK share that looks incredibly cheap to me.

At 69.2p per share, the business trades at a whopping 32.3% discount to its estimated net asset value (NAV) per share. This leaves scope for significant share price gains as eurozone interest rates fall, boosting asset values alongside economic activity in the region.

The trust owns retail, office, and industrial properties across Germany, France, and the Netherlands. And it focuses on attractive cities with strong economies and infrastructure (like Berlin and Paris) that can deliver long-term returns.

As a real estate investment trust (REIT), it must pay at least 90% of annual rental profits out by way of dividends. This could make it a great option for investors seeking large and reliable dividend income.

Indeed, the dividend yield here sits at a giant 8.4%.

The trust’s high exposure to cyclical sectors leaves it vulnerable to economic downturns. But on balance, I think it’s an attractive stock to consider, and especially given its current discount.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

AI Revolution Awaits: Uncover Top Stock Picks for Massive Potential Gains!

Buckle up because we're about to dive headfirst into the electrifying world of AI.

Imagine this: you make a single savvy investment in some cutting-edge technology, then kick back and watch as it revolutionises entire industries and potentially even lines your pockets.

If the mere thought of riding this AI wave excites you and the prospect of massive potential returns gets your pulse racing, then you’ve got to check out this Motley Fool Share Advisor report – 'AI Front Runners: 3 Surprising Stocks Riding The AI Wave’!

And here’s the kicker – we’re giving you an exclusive peek at ONE of these top AI stock picks, absolutely free! How’s that for a bit of brilliance?

Get your free AI stock pick

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has positions in Barratt Redrow and Persimmon Plc. The Motley Fool UK has recommended Barratt Redrow. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Like buying £1 for 51p

This seems ridiculous, but we almost never see shares looking this cheap. Yet this recent ‘Best Buy Now’ has a price/book ratio of 0.51. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 51p they invest!

Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.

What’s more, it currently boasts a stellar dividend yield of around 8.5%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?

See the full investment case

More on Investing Articles

Smiling senior white man talking through telephone while using laptop at desk.
Investing Articles

Here’s why I just bought this gold stocks fund for my SIPP!

I think investing in gold stocks could be the best way to capitalise on bullion's bull run. Here's a top…

Read more »

Investing Articles

How much passive income an investor could earn if they put £250 a month in an ISA at 40

Harvey Jones shows how small, regular investments can flourish into a generous passive income to secure a comfortable retirement years…

Read more »

Investing Articles

Stock market chaos! 3 pieces of investing wisdom from Warren Buffett

Billionaire Warren Buffett has been investing for many decades, making some of his quotes worth remembering when markets head south.

Read more »

Investing Articles

10%+ yields! 2 cheap dividend shares to consider as the economy wilts

These great value UK dividend shares could deliver a spectacular passive income even if the global economy sinks, says Royston…

Read more »

Investing Articles

Here’s the dividend forecast for Rolls-Royce shares as Trump rocks the markets

Rolls-Royce shares have joined in the volatility over the past week. However, with the direction being largely downwards, the dividend…

Read more »

Young Asian man drinking coffee at home and looking at his phone
Investing Articles

Dividend yields of up to 11%! Here are 3 UK passive income stocks to consider

Searching for ways to supercharge your passive income with UK dividend stocks? Here are three that have grabbed our writer's…

Read more »

Young Caucasian woman at the street withdrawing money at the ATM
Investing Articles

£10,000 invested in NatWest shares at the start of 2025 is now worth…

NatWest shares surged into 2025, but things have become a little more complicated in recent weeks. Dr James Fox explores.

Read more »

Investing For Beginners

Why the FTSE 250 could outperform the FTSE 100 for the rest of the year

Jon Smith explains why the FTSE 250 could do better than its big brother when factoring in domestic exposure and…

Read more »