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UK housebuilder stocks rise amid reports of stamp duty holiday extension

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Saleha Riaz
·2-min read
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Rowhouses in the district of Stratford, in the East End of London. Photo: Getty
Rowhouses in the district of Stratford, in the East End of London. Photo: Getty

UK housebuilder stocks soared on Wednesday amid reports that chancellor Rishi Sunak may extend the stamp duty holiday until the end of June to give the property market a boost.

At the moment, the holiday is meant to end on 31 March but The Times reported that Sunak will use his budget on March 3 "to move the stamp to the end of June, bringing it into line with the easing of lockdown restrictions."

"The chancellor has faced pressure to extend the deadline amid concerns that it would create a 'cliff-edge', jeopardising hundreds of thousands of sales," the publication noted.

Housebuilders Barratt Developments (BDEV.L), up roughly 2%, and Taylor Wimpey (TW.L), up about 1.5%, were among the FTSE 100's (^FTSE) top 20 risers.

Property developer British Land (BLND.L), which gained 1.8%, was also on the list, as was Land Securities (LAND.L), which ticked up 2%.

Persimmon (PSN.L) was up about 1.4% and Redrow (RDW.L) gained 3%.

WATCH: What do stamp duty cuts mean for buyers?

Estate agents also saw a boost. Foxtons (FOXT.L) was up about 4% and LSL Property Services (LSL.L) was also up about the same.

READ MORE: Most UK homebuyers want to see stamp duty holiday extended

"Whilst this will be welcome news for the housing market, it will also be met with caution as it merely kicks the can of the withdrawal effect down the road a little," warned Lee Pickett, partner and housing law specialist at legal business, DWF.

Since the introduction of the stamp duty holiday last year due to the coronavirus pandemic, the housing market skyrocketed with mortgage approvals, transactions and house prices all increasing in 2020.

Last month it was reported that two-thirds (67%) of UK homebuyers would like to see the current stamp duty holiday extended.

Nearly half (48%) of movers said they were concerned that their sale will not complete by the deadline which is currently 31 March, meaning they will still have to pay stamp duty.

Although many have pointed to the stamp duty holiday as the reason for the heightened activity in the UK property market, just 25% of homebuyers stated that it was the driving motivation behind their decision to buy, according to the survey of over 1,000 UK homebuyers.

Thousands of UK homebuyers could pull the plug on their deals if the stamp duty holiday is not extended, according to a separate survey.

Nearly three quarters (74%) of homebuyers are likely to cancel their planned move if they have to pay stamp duty, according to a survey of over 1,000 people by The Guild of Property Professionals.