Rishi Sunak’s Budget 2021 Boost Real Estate Sector, Most Stocks Up

Be the First to Comment Read

Rishi Sunak’s Budget 2021 Boost Real Estate Sector, Most Stocks Up

 Rishi Sunak’s Budget 2021 Boost Real Estate Sector, Most Stocks Up

Source: godshutter, Shutterstock

Summary

  • British Finance minister Rishi Sunak announced extended stamp duty holiday till June end for homes till £500,000.
  • Sunak also announced a new 95 per cent sovereign-backed mortgage guarantee scheme.

Real estate stocks reacted positively to the Chancellor of Exchequer Rishi Sunak’s Budget 2021 announcement to extend the stamp duty holiday. Stocks, like Taylor Wimpey, Persimmon etc. surged around 6 per cent. Sunak announced that stamp duty freeze on properties up to £500,000 would continue till June-end.

Overall, majority of real estate and related sector stocks on the FTSE indices moved up and reacted positively to the budget announcements by Sunak.

Taylor Wimpy Plc (LON: TW) was up 5.37 per cent after the budget announcement at GBX 174.80 , after opening at GBX 167.25  on Wednesday against its previous close of GBX 165.90 on Tuesday.

Persimmon Plc (LON: PSN) was up 5.90 per cent at GBX 2,870.00, after opening at GBX 2,710.00. Countryside Properties Plc (LON: CSP) was up 3.91 per cent at GBX 498, after opening at GBX 484.20.

Sunak declared that homes purchased up to £250,000 would enjoy tax holiday till the end of September. Sunak’s announcement to extend the stamp duty holiday was on expected lines. A day before the budget, it was reported that property prices in the UK for February rose 0.7 per cent as demand built due to the stamp duty holiday.

Sunak also announced a new sovereign-backed mortgage guarantee scheme to bring back the low-deposit mortgage into the property ladder. The Chancellor said that the 95 per cent mortgages would be sovereign-backed and would help rent payers to become homebuyers.

Sunak said that some of the UK’s biggest lenders, including Lloyds Banking Group Plc (LON: LLOY), NatWest Group (LON: NWG), Banco Santander SA (LON: BNC) Barclay Plc (LON: BARC)  and HSBC Holdings Plc (LON: HSBA), would start offering these mortgages from next month onwards. Other lenders, including Virgin Money Plc (LON: VMUK) will follow shortly after,” the chancellor says.

Sunak said that the policy would help those who could not afford big deposits a chance to own their own house.

The Covid-19 pandemic wiped out low-deposit mortgages last year. Most lenders would offer mostly 90 per cent loan-to-value, leaving buyers to pay up the rest of the 10 per cent. This made home buying an expensive proposition for first time buyers.

Disclaimer

Speak your Mind

Featured Articles