JP Morgan has warned that speculation over sweeping changes to housing policy could weigh on UK housebuilder activity in the short term, even as it judged the mooted reforms broadly positive for the sector in time.
The bank set out a series of measures reportedly under consideration by Andy Burnham, the ex mayor of Greater Manchester and expected next Prime Minister.
These include replacing council tax and stamp duty with a single annual property tax, and lowering the threshold for the so-called mansion tax to £1.5 million from £2 million.
Burnham is also said to be targeting the largest council house building programme since the post-war period, alongside measures to help young people onto the housing ladder.
These would include tax breaks for the first three years of employment and state-backed deposit loans.
JPM said housing delivery appeared high on Burnham's agenda and would likely support new transactions.
The bank cautioned, however, that continued speculation could soften sales rates in the near term.
It drew a parallel with the run-up to the 2025 Autumn Budget, when uncertainty similarly weighed on activity.
On individual stocks, the bank pointed to greater earnings risk at Taylor Wimpey, which it rates underweight.
The housebuilder told its recent annual meeting that first-half operating profit would come in slightly below prior expectations of 30% of the full-year total, leaving its guidance weighted towards the second half.
JPM said Persimmon PLC (LSE:PSN), which it rates 'overweight', looked best placed to weather the uncertainty given its lower or in some cases zero stamp duty costs.
The bank noted the builder held up well in 2025, when its sales rate remained strong into the budget while peers softened.
The picture is more mixed for Berkeley Group Holdings PLC (LSE:BKG), also rated 'overweight'.
JPM said London carried the highest stamp duty burden given higher selling prices, so reform could help transactions there.
But it warned that a property tax would impose higher ongoing costs in the capital in perpetuity, potentially weighing on pricing.
