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Summary
- There has been a 48.5 per cent annual jump in British housing transactions in February.
- Non-residential transactions rose by 10.3 per cent on a year-on-year basis in February.
- The UK government will legislate to clamp down on second homeowners, thereby lowering tax evasion in the long run.
There has been an almost 50 per cent increase in residential transactions across Britain in February, according to the latest data on government property transactions. UK residential transactions were estimated to be 147,050 in February 2021, which was 48.5 per cent higher than the corresponding figure last February. Non-residential transactions were estimated to be 10,630, up 10.3 per cent on a year-on-year basis.
In fact, the government data revealed that the sales volumes had exceeded 100,000 for five months in a row, for the first time since 2017 summer months. Market analysts pointed out that the surge was driven by factors such as a rush to meet the deadline for the stamp duty holiday, gradual easing of the coronavirus restrictions and the success of the ongoing vaccine rollout programme.
In another development, the UK government said that it would tighten tax rules for second property owners so that they are able to register for business rates only if their properties are let-out for a holiday. According to the existing legislation, many holiday-lets in England can pay business rates instead of the council tax in case the property owner declares that he would be letting out his property in the next year. This would reduce the incidence of tax evasion by non-genuine businesses.
Now, let us take a closer look at the prospects of select UK house builders and property investment companies listed on LSE.
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Barratt Developments Plc (LON:BDEV)
Last month, the company released its half-yearly earnings for the period ending 31 December 2020. Displaying strong results, the house builder’s profit before tax was up 1.7 per cent to £430.2 million for H1 2020, from £423.0 million in H1 2019. Its basic earnings per share were 34.3p for the period (H1 2019: 33.8p). It had net cash of £1.11 billion for the half yearly period in 2020 (H1 2019: £433.8 million).
The company’s shares (LON: BDEV) were trading at GBX 772.60, down 0.69 per cent on 24 March at 9.39 AM on the London Stock Exchange.
Persimmon Plc (LON:PSN)
The York-based home building company released its results for the financial year ending 31 December 2020 this month. Dean Finch, Persimmon’s group chief executive, said that despite challenges posed by the pandemic, the company delivered a robust performance in 2020. The company’s new home average selling price last year was £230,534, up from a value of £215,709 in FY 2019. The total group revenue for 2020 was £3.33 billion (FY 2019: £3.65 billion), while the profit before tax was £783.8 million for the same period (FY 2019: £1,040.8 million).
The company’s shares (LON: PSN) were trading at GBX 2,951.00, down 0.87 per cent on 24 March at 9.39 AM on the LSE.
Land Securities Group Plc (LON:LAND)
The leading real estate development and investment firm displayed a strong balance sheet despite Covid impact, according to its latest financial results. The company’s revenue was down 48.9 per cent to £115 million, while its loss before tax was £835 million for the six-month period ending 30 September 2020. The company declared a dividend per share of 12p for the reported period (6 months ending Sep 2019: 23.2p).
The company’ shares (LON: LAND) were trading at a value of GBX 680.90, up 0.07 per cent on 24 March at 9.37 AM from its previous day’s close.
