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Redrow calls for long-term cut in house buying tax

Aby Jose Koilparambil
·2-min read
FILE PHOTO: The company logo of construction company Redrow is pictured on a flag at a new housing development near Manchester northern England.

By Aby Jose Koilparambil

(Reuters) - Britain's Redrow said on Wednesday a long-term cut in house buying tax would be better than extending the current payment holiday, as it reported an 11% rise in half-year profit.

The housebuilder joined rivals in resuming dividend payouts as the break in so-called stamp duty tax and low interest rates boosted sales, with some buyers seeking larger properties as they work more from home in the COVID-19 pandemic.

"For a stamp duty holiday, it would come to a close at some point. It pumps up the number of sales very quickly, but clearly people are rushing to an end day and then it stops," said Chief Executive Matthew Pratt in a media call.

Last July, Britain suspended purchase taxes for homes costing up to 500,000 pounds ($692,000) until March 31, 2021, to support the housing market. British media have said finance minister Rishi Sunak might extend the tax relief.

"If we get a longer term reform, the view would be if we lower stamp duty to a more reasonable level, the chances are we would get more transactions which in itself would create tax," Pratt said, without suggesting a figure.

Demand for Redrow's "Heritage" suburban homes that feature designs and finishes popular in the late 19th and early 20th centuries has been particularly high as the lockdown has led Britons to focus more on quality homes, the company said.

Redrow, which has over 95% of homes forward sold for the current fiscal year, said pretax profit rose to 174 million pounds ($240 million) in the six months to Dec. 27 and its order book stood at a record 1.3 billion pounds.

The FTSE 250 firm declared an interim dividend of 6 cents per share.

Pratt also said construction workers should be prioritised in Britain's vaccination drive as they can't work remotely. The initial lockdowns in 2020 left construction sites empty for months.

(Reporting by Aby Jose Koilparambil in Bengaluru. Editing by Rashmi Aich and Mark Potter)