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U.K. home builders got a lift on Monday on reports of a stamp duty rise and a well-received update from Barratt Developments.
Chancellor Rishi Sunak is set to announce this week he will raise the threshold at which home buyers start paying stamp duty to as high as £500,000 from £125,000, according to The Times.
The average house price in the U.K. was £231,855 in March, according to official data. Stamp duty is a lump sum payment that anyone buying a property or piece of land over a certain price has to pay.
The gains also come as Barratt BDEV, +6.83% said the number of completions, including joint ventures, in its June 30-ending year fell 29% to 12,604. Barratt shares rose 6%.
Barratt, which said it scrapped a previously planned special dividend and said it wouldn’t pay a final dividend, said it was growing a little more optimistic, with net private reservations per active outlet falling slightly to 0.63 a week in the six weeks to date, from 0.69 a year prior.
Its order book had forward sales of 14,326 homes as of June 30, up from 11,419 a year before.
Analysts at Peel Hunt, who have a hold rating on Barratt, said it was unsurprising the dividend was scrapped. They said the balance sheet remains in good shape, and liquidity is strong.
Shares of Persimmon PSN, +5.04%, due to give an update on Thursday, rose nearly 6%, and gains also were seen for Redrow RDW, +5.33% and Taylor Wimpey TW, +4.59%.
The broader FTSE 100 UKX, +1.68% gained 1.9%. Optimism over the global economic recovery, in China in particular, drove stocks higher.
Pubs and hairdressers reopened in England over the weekend, and Springboard reported that in England pedestrian activity, or footfall, shot up by 19.7% on Saturday compared with last week.
