Potential stamp duty cut amid rising prices

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Potential stamp duty cut amid rising prices

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 Potential stamp duty cut amid rising prices
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Highlights

  • UK chancellor Kwasi Kwarteng is likely to declare a cut in stamp duty to boost economic growth.
  • A reduction in stamp duty would enable more people to move and allow first-time buyers to climb the property ladder.
  • During the pandemic phase, there was a rise in the stamp duty threshold for supporting the stimulation of the property market.

UK chancellor Kwasi Kwarteng is likely to declare a cut in stamp duty to boost economic growth. A reduction in stamp duty would enable more people to move and allow first-time buyers to climb the property ladder. UK PM Liz Truss said that lowering the levy is critical for Britain’s economic growth.

During the pandemic phase, there was a rise in the stamp duty threshold for supporting the stimulation of the property market, lifting it to £500,000. Buyers hurried to expand their savings during the holiday, leading to an increase in demand. Former chancellor Rishi Sunak initiated the move.

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Nevertheless, despite surging interest rates, the COVID-era housing boom is still not showing signs of letting up. As per the latest data published by the Office for National Statistics (ONS), the price of an average UK home soared by 15.5% from July 2022, showing the greatest rise in 19 years.

The ONS said that due to adjustments in the stamp duty holiday, "a base effect" from the dropping prices witnessed at the same time last year primarily led to the rise in the annual inflation levels. UK inflation continues to be close to 40-year highs. While prices surge, UK investors can keep an eye on the following real estate stocks. 

CT Property Trust Ltd (LON: CTPT)

The market cap of the real estate investment trust (REIT), CT Property Trust Ltd, stands at £193.93m as of Thursday. CTPT shares were trading at GBX 81.80 on 22 September, experiencing a drop of 0.73% at 1:34 PM (GMT+1). The company's return on a one-year basis stands at 11.38%. Meanwhile, its YTD (year-to-date) return as of 22 September stands at -3.75%. Offering a yearly dividend yield of 4.0%, the company has a P/E ratio of 3.09. Its turnover (on the book) currently stands at £13,796.53. 

Palace Capital plc (LON: PCA)

The company's market cap focused on regional property investment, Palace Capital plc, stands at £113.59m as of Thursday. PCA shares were trading at GBX 255.00 on 22 September, experiencing a drop of 1.16% at 1:38 PM (GMT+1). The company's return on a one-year basis stands at 4.08%. Meanwhile, its YTD return as of 22 September stands at -5.20%. Offering a yearly dividend yield of 4.1%, the company has a P/E ratio of 4.87. Its turnover (on a book) currently stands at £191.25. 

Residential Secure Income plc (LON: RESI)

The company's market cap is investing in portfolios of Homes across the UK, Residential Secure Income plc, which stands at £204.61m as of Thursday. RESI shares were trading at GBX 107.00 on 22 September, experiencing a drop of 3.17% at 1:42 PM (GMT+1). The company's return on a one-year basis stands at 0.94%. Meanwhile, its YTD return as of 22 September stands at -0.93%. Offering a yearly dividend yield of 4.4%, the company has a P/E ratio of 13.04. Its turnover (on a book) currently stands at £18,988.58.

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