Next week’s Budget is likely to be the no-news Budget for house builders.
At least that’s the opinion of Deutsche Bank, which has previewed the Chancellor Philip Hammond’s set-piece next Wednesday, assessing how it might affect the industry.
As the Deutsche team points out, the builders have historically featured heavily in previous Budgets as first the Coalition and then the Tories have looked at methods of tackling the lack of affordable housing.
In fact, the problems and attempts to right the market go back even further.
This time around, the focus is likely to be elsewhere as we have just recently seen the publication of the Housing White Paper, which provides a whole slew of new initiatives, the German bank points out.
There have been the usual industry calls to cut Stamp Duty in order to kick start activity, which are likely to be resisted, Deutsche says.
If Hammond does surprise and opts to reduce the tax paid on purchasing a new home then this would benefit London-focused Berkeley (LON:BKY) most and to a lesser extent the volume builders.
A possibility, according to the Deutsche research team, but only a faint one, is that Hammond may provide some sort of Stamp Duty relief for those downsizing in order to encourage the process and stimulate the wider market.
This would help the retirement specialist McCarthy & Stone (LON:MCS).
“With the Housing White Paper highlighting the intention to look at ways to incentivise older people to downsize, a targeted stamp duty relief to downsizers can’t be ruled out,” Deutsche said in a note to clients.
Its sector top picks are Barratt Developments (LON:BDEV), Taylor Wimpey (LON:TW.) and the aforementioned McCarthy & Stone.