UK housing stocks rise on potential cut in stamp duty

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UK's homebuilders' stocks rose sharply in morning trade on Wednesday after a media report said the British government would cut stamp duty in mini-budget on Friday.

all gaining between 2.6% and 4.7%, placing them among the top percentage gainers in the blue-chip index.

The Times, on Tuesday, reported that newly appointed Prime Minister Liz Truss would announce radical plans to cut stamp duty in the government's mini-budget this week in an attempt to drive economic growth.Reuters could not immediately verify the news. The potential cut comes at a time when UK housing sector has shown signs of losing some momentum as surging costs of everything from fuel to home appliances puts pressure on household finances and a rise in mortgage rates impedes customer affordability.

Stamp duty cut on property purchases was used as a key policy by previous finance minister Rishi Sunak and housebuilders were among the rare winners during the pandemic when the tax holiday propped purchases. Currently, no stamp duty is paid on the first 125,000 pounds of any property purchase, with duties kicking in at 2% for 125,001-250,000 pounds, 5% for 250,001-925,000 pounds, 10% for 925,001-1.5 million pounds and 12% for above 1.5 million pounds.Reporting by Aby Jose Koilparambil and Yadarisa Shabong in Bengaluru; Editing by Savio D'Souza

 

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