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Summary
- Bank of England explores the idea of making mortgage terms more lucid for first-time home buyers. There are reports that such buyers have been left out due to tough lending regulations.
- The implementation of the proposal could see the housing demand jump further especially in the lower priced high-volume market segment.
- The sector has already seen a surge in demand due to the stamp duty holiday announced earlier this year.
The Bank of England (BoE) is mulling over a new proposal to relax mortgage norms to make it easier for the first-time home buyers to avail loans. The new proposal has been formulated especially for the first-time buyers who were left out in the recent boom. If implemented, it will provide further fillip to the industry which is already on a high-growth path.
The stamp duty holiday
In July, British Chancellor of the Exchequer Rishi Sunak had announced a stamp duty holiday on house purchase transactions which will be applicable for a period of eight months till March 2021. The scheme potentially translated into house owners saving up to £15,000 in their purchases. This immediately brought back a lot of queries and offers to the estate agent counters. After the announcement, a massive surge was witnessed in the housing sector in the UK.
(Image Source: ©Kalkine Group 2020)
Five housing companies which could perform well in the next few months
Taylor Wimpey plc
(Source: Refinitiv Thomson Reuters)
The shares of Taylor Wimpey plc (LON: TW) were trading at GBX 150.55 per share as on 11 December, losing 1.79 per cent over the previous day’s close
Barratt Developments plc
(Source: Refinitiv Thomson Reuters)
The stock of Barratt Developments plc (LON: BDEV) was trading at GBX 583.65 on 11 December, losing 2.50 per cent over the previous day’s close.
Redrow plc
(Source: Refinitiv Thomson Reuters)
The stock of Redrow plc (LON: RDW) closed at a value of GBX 493.20 on 11 December, losing 4.14 per cent over the previous day’s close.
Persimmon plc
(Source: Refinitiv Thomson Reuters)
The share price of Persimmon plc (LON: PSN) settled at a value of GBX 2,463.00 per share on 11 December, losing 2.03 per cent over the previous day’s close.
Countryside properties plc
(Source: Refinitiv Thomson Reuters)
The shares of Countryside properties plc (LON: CSP) closed at GBX 400.40 on 11 December, falling by 2.48 per cent points over the previous day’s close.