Londoners face a 36% rise in stamp duty as homes are set to hit Â£500,000
London home-buyers could face a 36% jump in their stamp duty bill in the next two months as the average house price in the Capital breaches the 4% property tax threshold. The cost of the average London dwelling is rapidly approaching the Â£500,001 mark, at which point the stamp duty banding changes from 3% to 4% on the purchase price of the house.
The value of a typical home in the Capital rose 20% over the year to May and is now valued at Â£492,000. Sitting within the 3pc stamp duty banding this would cost the buyer Â£14,760 in tax.
Agree and of course Berkeley are much less reliant on the Help to Buy Scheme than other housebuilders:-
"Whilst the Government's Help to Buy scheme has been helpful in bringing home ownership to within the reach of many more people, it has had limited benefit to Berkeley as a whole due to the proportion of its sales which are off-plan. On the 17 schemes where qualifying properties were available, it has supported some 36% of sales in the year, a total of 159 sales over the last twelve months"
So only 159 sales out of a total of 3,742 - just over 4%. Housing demand in London and the southeast appears to be strong and the outlook for BKG very positive:-
"With cash due on forward sales now approaching £2.3 billion and estimated gross margin in its land holdings now in excess of £3 billion"
Six months ago everybody loved housebuilders. Now they seem to hate them. Talk of cutting the Help to Buy scheme and raising ineterest rates, plus the significant rises already seen in the sector have provoked a sell off. This, in my view, is a huge error. It is possible that profit margins may be tighter in future if the heat comes out of prices, but demand for housing is way behind supply and governments of whatever colour are going to have to sanction a growth in housebuilding over the next 5-10 years or risk the anger of the population, especially those who wish to own their own home. Consequently housebuilders, especially those with good land stocks are going to be pretty busy in the mid term and profits will be driven my increased volumns rather than silly prices. Yields for a number of companies in this sector look very good and sustainable (Persimmon/Galliford/Kier) so there are mid term opportunities here for income seekers. P/es are a tough frothy for some, but Berkeley looks cheap at 10. Oversold, the only question is how much lower do we want them to go before topping up ?
that does assume that the 2nd interim dividend does not rise beyond 59p; I believe it will - if the 2nd divi also rose to 90p that woudl give a total divi of 180p/1600 = circa 7% which would not be shocking as gsk pay 5% and this company has some cracking prospects. I do note that although Berkeley stated the 90p dividend way in advance, last year an interim ex-dividend date was 20th March and payment date 19th April, then we have august/september and december/january's divis; so an announcement will be made soon regarding the next interim dividend to be paid and how much so we shall see - i predict 80-90p and then of course there is another dividend payout in september and they mots certainly will be paying out but they are keeping their cards close to their chests as to what the payment is and when the x-dividend date is to avoid carpet baggers
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