Extend stamp duty cut for good, Berkeley boss says

Ben Gartside
For sale signs
For sale signs

The chief executive of housebuilder Berkeley Group has called on Rishi Sunak to scrap stamp duty for houses worth under £500,000 permanently.

The Chancellor announced a stamp duty holiday at the start of the crisis, setting a light under the property market and encouraging thousands of people to move home. The holiday ends on March 31. Rob Perrins said this cut "proved what a poor tax Stamp Duty is".

"Looking forward, I really hope he extends permanently the Stamp Duty Holiday for homes worth up to £500,000, and halves the rate for those above that," he said. "Stamp duty causes a huge drag on the economy, and causes people to live in the wrong home.”

He said that the inability for buyers to move up the housing ladder exacerbated the existing issues for those failing to get on in the first place.

Mr Perrins also championed the return of 95pc mortgages, and said the Bank of England needed to relax lending laws.

He said that it “couldn’t be right” that renters paying out £1,000 a month for years could only apply for mortgages at a significantly lower monthly rate.

But the Berkeley  boss said he was “incredibly optimistic” about the future of London property, despite a perceived exodus throughout lockdown.

The housebuilder has invested £400m into London in the last six months as it looks to take advantage of lower prices.

Nicholas Hyett at Hargreaves Lansdown said this was a vote of confidence in the London housing market.

“Given the group is... actually running slightly ahead of where it expected to be at this point in the year, that confidence is probably justified,” he added.

The housebuilder posted a pre-tax profit of £230.8m for the six months to the end of October, down 16.6pc on the same period last year.

It sold 1,104 homes across the period, compared to 1,389 in 2019, albeit with a higher average selling price of £799,000. Revenue slipped slightly, down 3.8pc to £895.9m.

Its forward sales have risen to £1.94bn, which Berkeley said supported its “long-term guidance”.

Morgan Stanley analyst Christopher Fremantle said the company’s trading had been resilient, but added that its valuation looked “rich”. Shares were down 0.8pc in noon trade at £48.15, valuing it around £6bn.