UK housing stocks rise on potential cut in stamp duty

UK homebuilders’ stocks rose sharply in morning trade on Wednesday (Sep 21) after a media report said the British government would cut stamp duty in a mini-budget this Friday.

The UK housebuilders’ index rose 3.2 per cent, with FTSE 100 stocks Barratt, Persimmon Taylor Wimpey and Berkeley all gaining between 2.6 per cent and 4.7 per cent, 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 the UK housing sector has shown signs of losing some momentum as surging costs of everything from fuel to home appliances put 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. REUTERS