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UK Homebuyers Delay Deals Ahead of October Budget Uncertainty
Some people in the UK want to buy homes but are waiting.
They want to see what the government announces in October’s Budget first.
Berkeley, a large housebuilder, says people are still asking about homes.
However, fewer of those interested people are completing purchases.
Higher borrowing costs and uncertainty are making buyers and builders more careful.
Berkeley says stamp duty is now making it harder for people to move.
It wants lower taxes for first-time buyers and people moving to smaller homes.
The company says this could help more homes become available and support the government’s building target.
Berkeley says some buyers are delaying transactions until after October’s Budget.
The housebuilder reported weaker activity despite continued stable levels of buyer inquiries.
Political uncertainty, economic conditions and conflict in the Middle East have reduced confidence.
Berkeley called for urgent stamp duty reform, including a proposed 1% cap for first-time buyers and downsizers.
The company has stopped buying land and slowed some building plans as its profit outlook weakens.
- Who
- Berkeley, prospective homebuyers, developers and the UK government.
- What
- Some homebuyers are delaying transactions ahead of October’s Budget, while Berkeley is calling for stamp duty reform and slowing development activity.
- Where
- The United Kingdom, particularly London and southeast England, where Berkeley mainly operates.
- When
- In the four months ending in August, with further delays possible until after the Budget at the end of October.
- Why
- Political and economic uncertainty, higher borrowing costs, the conflict in the Middle East and uncertainty over potential Budget measures are weakening confidence.
Key facts
- Company
- Berkeley built 4,076 homes in its last financial year.
- Market concern
- Some buyers with no immediate need to move and readily available funds may defer transactions.
- Government target
- The government is pursuing a target of building 300,000 new homes a year.
- Proposed stamp duty measure
- Berkeley proposes capping stamp duty at 1% for first-time buyers and downsizers.
- Investor surcharge proposal
- Berkeley wants the 5% stamp duty surcharge for investors removed.
- Profit outlook
- Berkeley forecasts aggregate pre-tax profit of £1.4 billion between 2027 and 2030, nearly £600 million below earlier analyst expectations.
- Share performance
- Berkeley shares have fallen about 10% over the past year and closed at £32.84 after a 0.3% decline.
Quotes
Berkeley
UK housebuilder Berkeley
“What was a manageable frictional cost when interest rates were at those unique and unsustainable levels has become a binding constraint now that interest rates have returned to more normal levels”
easterneye.biz
“Far more tax revenue is being lost through depressed activity than is being gained through stamp duty land tax on new-build homes as set out by HMRC’s own assessment”
easterneye.biz
Sources
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