Shares in high street agents rise as Chancellor announces Stamp Duty abolition – but shivers among builders

Share prices of high street agents climbed yesterday as the Budget was delivered.

Foxtons’ shares went up over 6%, with the ascent starting at almost exactly the time, just before 2pm,  that Chancellor Philip Hammond announced the abolition of Stamp Duty for first-time buyers.

The price fell back briefly, but then continued rising as the afternoon wore on, finishing at 72p – up from 67p at the start of the day.

Countrywide shares yesterday put on over 3%, with the biggest rise again just before 2pm.

They finished at around 115p.

LSL shares also put on over 2%, again in the latter part of the day, rising to 246p.

Purplebricks – whose business model is about listings revenue rather than earning a fee through sales – proved an exception, with its share price falling back by over 1%, to finish at 350p. However, the small fall in the Purplebricks share price came after a series of rebounds.

Listed house builders lost out yesterday, slumping to the bottom of the FTSE, despite a £44bn pump of money into the house building sector announced in the Budget.

But while the Chancellor announced a big rise in house building – 300,000 new homes to be built every year until the mid 2020s – he also announced bigger support for small developers, plus a potential clampdown on developers who hoard land.

Yesterday, Barratts shares came down 4% in value, while Taylor Wimpey, Persimmon and Berkeley Homes share prices also all dropped about 2%.

In yesterday’s Budget, Hammond said he was launching an urgent review chaired by Oliver Letwin, to investigate the “significant gap between the number of planning permissions granted and the number of homes built”.

Hammond said: “In London alone, there are 270,000 residential planning permissions unbuilt. We need to understand why.”

 

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One Comment

  1. g4lvo17

    In London alone, there are 270,000 residential planning permissions unbuilt. We need to understand why

     

    Well Mr Hammond

    This is partly due to the fact that big developers don’t build all their sites as soon as they get permission , but feed them in as other sites complete and the workforce becomes available, it is stupid to think there is an unlimited supply of labour. secondly many planning conditions imposed by local authorities can make it almost uneconomic to build when prices are subdued, they therefore need to wait for an upswing in values to commence work.

    Tell Oliver Letwin he needn’t bother now I have explained it for you 🙂

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