Liz Truss is a better candidate for housebuilders than Rishi Sunak, according to analysts at UBS.
Taylor Wimpey PLC (LSE:TW.), Persimmon PLC (LSE:PSN) and Barratt Developments PLC (LSE:BDEV) are just a few of the housebuilders which would benefit from a Truss-led government, analysts reckon.
UBS believes Truss appears to be in favour of increasing home ownership, introducing a policy where rent payments could be used in mortgage affordability tests.
A government report in June supported the logic of this idea, stating that “over 50% of today’s rents could afford the monthly cost of a mortgage but various constraints mean only 6% could immediately access a first-time buyer mortgage.”
Additionally, the 47-year-old has historically been in favour of building on the green belt land, that being an area of countryside where urbanisation will be resisted and could prove controversial in the Tory heartlands.
Additionally, Truss is in favour of reducing the bureaucracy required when building new homes and making it quicker to build in brownfield land, all of which would increase the number of homes.
However, pledging to walk away from the 300,000 housing target and increasing local community decisions in planning has provided uncertainty as to whether she actually supports building more houses.
Sunak’s policies, on the hand, are “more marginal from the status quo,” UBS said.
The former chancellor seems focused on reducing the supply shortage, analysts said, in particular in the inner city and brownfield developments, such as the Midlands and North England.
He also wants to remove barriers for smaller housebuilders and commented he would cut government funding for affordable housing and offer incentives for housebuilders to build homes that lower-income households could afford.
Sunak has also made it clear he would protect the green belt and restrict local authorities from moving existing boundaries.