Last year we saw the UK Index house builders have a good few days following George Osborne’s autumn statement in which stamp duty reforms were announced to the benefit of those with less than a million pounds to spend. With the tax again part of this year’s statement, UK 100 house builders were again in the spotlight. While a 3% hike in stamp duty for second homes and buy-to-let properties turned market attention to the likes of Taylor Wimpey (TW.), Barratt Developments (BDEV) and Persimmon (PSN), what does the tax change mean for the UK housing market? Not much in our view.

Demand for houses is no different to what it was before the autumn statement. The UK has a huge shortage. George still needs 400,000 new homes to satisfy demand, and they are not going to build themselves. A few self-build grand designs maybe, but not all. While shares in the UK house builders had been looking ‘toppy’ to investors – trading at all-time highs, they are now off those highs and being considered interesting opportunities given the strong market fundamentals. It may sound like George was trying to discourage buy-to-let, but he won’t really with long-term investors unlikely put off by a small tax rise.

House building stocks are hence some of the most interesting this week. And could well be worth a look at into the end of the year. To top it all off, you can trade them with Accendo Markets and pay no stamp duty!

James Abbot, Senior Trader