| Persimmon PLC (GB0006825383) | |||
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| 22.04.25 13:40:07 | Is Holcim Ltd Unsponsored ADR (HCMLY) Outperforming Other Construction Stocks This Year? |  |
| The Construction group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Holcim Ltd Unsponsored ADR (HCMLY) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? A quick glance at the company's year-to-date performance in comparison to the rest of the Construction sector should help us answer this question. Holcim Ltd Unsponsored ADR is a member of our Construction group, which includes 90 different companies and currently sits at #9 in the Zacks Sector Rank. The Zacks Sector Rank considers 16 different sector groups. The average Zacks Rank of the individual stocks within the groups is measured, and the sectors are listed from best to worst. The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. Holcim Ltd Unsponsored ADR is currently sporting a Zacks Rank of #1 (Strong Buy). Over the past three months, the Zacks Consensus Estimate for HCMLY's full-year earnings has moved 6.3% higher. This means that analyst sentiment is stronger and the stock's earnings outlook is improving. According to our latest data, HCMLY has moved about 10.2% on a year-to-date basis. Meanwhile, stocks in the Construction group have lost about 15.9% on average. This shows that Holcim Ltd Unsponsored ADR is outperforming its peers so far this year. Another stock in the Construction sector, Persimmon Plc (PSMMY), has outperformed the sector so far this year. The stock's year-to-date return is 6.2%. For Persimmon Plc, the consensus EPS estimate for the current year has increased 2.5% over the past three months. The stock currently has a Zacks Rank #2 (Buy). To break things down more, Holcim Ltd Unsponsored ADR belongs to the Building Products - Miscellaneous industry, a group that includes 30 individual companies and currently sits at #156 in the Zacks Industry Rank. On average, stocks in this group have lost 18.2% this year, meaning that HCMLY is performing better in terms of year-to-date returns. Persimmon Plc, however, belongs to the Building Products - Home Builders industry. Currently, this 16-stock industry is ranked #189. The industry has moved -19.1% so far this year. Investors interested in the Construction sector may want to keep a close eye on Holcim Ltd Unsponsored ADR and Persimmon Plc as they attempt to continue their solid performance. Story Continues Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Holcim Ltd Unsponsored ADR (HCMLY) : Free Stock Analysis Report Persimmon Plc (PSMMY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research View Comments |
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| 10.04.25 06:37:26 | Persimmon (LON:PSN) stock falls 8.1% in past week as three-year earnings and shareholder returns continue downward trend | |
| Many investors define successful investing as beating the market average over the long term. But the risk of stock picking is that you will likely buy under-performing companies. Unfortunately, that's been the case for longer term Persimmon Plc (LON:PSN) shareholders, since the share price is down 49% in the last three years, falling well short of the market decline of around 3.6%. The last week also saw the share price slip down another 8.1%. But this could be related to the soft market, which is down about 10% in the same period. Since Persimmon has shed UK£307m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price. During the three years that the share price fell, Persimmon's earnings per share (EPS) dropped by 30% each year. In comparison the 20% compound annual share price decline isn't as bad as the EPS drop-off. So the market may not be too worried about the EPS figure, at the moment -- or it may have previously priced some of the drop in. You can see how EPS has changed over time in the image below (click on the chart to see the exact values).LSE:PSN Earnings Per Share Growth April 10th 2025 Dive deeper into Persimmon's key metrics by checking this interactive graph of Persimmon's earnings, revenue and cash flow . What About Dividends? It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Persimmon's TSR for the last 3 years was -40%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return. A Different Perspective We regret to report that Persimmon shareholders are down 11% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 1.9%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 3% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand Persimmon better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Persimmon you should be aware of. Story Continues For those who like to find winning investments this freelist of undervalued companies with recent insider purchasing, could be just the ticket. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on British exchanges. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
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| 26.03.25 13:35:16 | With 82% institutional ownership, Persimmon Plc (LON:PSN) is a favorite amongst the big guns | |
| Key Insights Significantly high institutional ownership implies Persimmon's stock price is sensitive to their trading actions The top 23 shareholders own 51% of the company Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. A look at the shareholders of Persimmon Plc (LON:PSN) can tell us which group is most powerful. The group holding the most number of shares in the company, around 82% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company. Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute. In the chart below, we zoom in on the different ownership groups of Persimmon. Check out our latest analysis for Persimmon LSE:PSN Ownership Breakdown March 26th 2025 What Does The Institutional Ownership Tell Us About Persimmon? Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index. Persimmon already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Persimmon's historic earnings and revenue below, but keep in mind there's always more to the story.LSE:PSN Earnings and Revenue Growth March 26th 2025 Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Persimmon is not owned by hedge funds. BlackRock, Inc. is currently the largest shareholder, with 6.8% of shares outstanding. With 5.0% and 4.9% of the shares outstanding respectively, The Vanguard Group, Inc. and Amundi Asset Management SAS are the second and third largest shareholders. After doing some more digging, we found that the top 23 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company. Story Continues While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too. Insider Ownership Of Persimmon The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves. Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances. Our most recent data indicates that insiders own less than 1% of Persimmon Plc. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around UK£19m worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling. General Public Ownership The general public-- including retail investors -- own 17% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders. Next Steps: While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 1 warning sign for Persimmon that you should be aware of before investing here. But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future. NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
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| 25.03.25 15:40:05 | PSMMY vs. NVR: Which Stock Is the Better Value Option? |  |
| Investors with an interest in Building Products - Home Builders stocks have likely encountered both Persimmon Plc (PSMMY) and NVR (NVR). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out. We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits. Persimmon Plc and NVR are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This means that PSMMY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors. Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels. The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value. PSMMY currently has a forward P/E ratio of 12.48, while NVR has a forward P/E of 14.60. We also note that PSMMY has a PEG ratio of 0.80. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. NVR currently has a PEG ratio of 2.43. Another notable valuation metric for PSMMY is its P/B ratio of 1.16. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, NVR has a P/B of 5.36. These are just a few of the metrics contributing to PSMMY's Value grade of B and NVR's Value grade of C. PSMMY stands above NVR thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PSMMY is the superior value option right now. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Persimmon Plc (PSMMY) : Free Stock Analysis Report NVR, Inc. (NVR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research View Comments |
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| 18.03.25 13:15:41 | First-time buyer mortgage sales in the UK at lowest level in a decade | |
| Mortgage sales for first-time buyers in the UK have reached their lowest point in over a decade, with new data revealing that 2023 marked the fewest first-time buyer mortgages since 2013. The Office for National Statistics (ONS) analysed data from the Financial Conduct Authority (FCA) and found 282,000 new first-time buyer mortgages in 2023 – down from the peak of 394,000 in 2021. This drop comes after a period of strong growth in the early 2010s, when first-time buyer mortgages steadily increased following the 2008 global financial crisis. In 2023, first-time buyer mortgages accounted for 38.4% of all residential property sales, up from 28% a decade earlier. The surge in first-time buyer activity following the 2008 crash was followed by a major dip during the pandemic. In 2020, the number of first-time buyer mortgages fell to just 297,000, amid lockdown restrictions and economic uncertainty. However, the following year saw a rebound, with 2021 reaching the highest number of new mortgages in recent years, largely driven by the temporary stamp duty holiday, which ran from June 2020 to July 2021. Read more:Bank of England poised to hold UK interest rates amid Trump trade war Since 2021, though, the trend has reversed, with sales dropping by nearly 30% between 2021 and 2023, landing at 282,000 – a figure not seen since 2013. Despite this, the proportion of first-time buyers relative to overall housing sales has continued to rise steadily. Between 2006 and 2008, fewer than a quarter of residential sales were made up of first-time buyer mortgages. This figure grew to around one-third (33.8%) by 2018, and by 2023, it had reached 38.4%. This shift is largely due to a faster decline in overall housing sales between 2021 and 2023 (-39.8%) compared to the fall in first-time buyer mortgage sales (-28.6%). London no longer the top location for first-time buyers Once the dominant region for first-time buyer mortgages, the capital now accounts for just 12.7% of all sales, down from 16.8% over a decade ago. Back in 2013, the areas with the highest rates of first-time buyer mortgages were all in London. In particular, Lambeth, Tower Hamlets, and Wandsworth led the pack. However, these areas have seen some of the largest falls in first-time buyer mortgage rates over the last decade, with Lambeth and Tower Hamlets both experiencing declines of over 30%. Read more:Best UK mortgage deals of the week Richard Donnell, executive director at Zoopla, said: “First-time buyers struggle where the cost of buying a home is the greatest, increasing the need for a larger deposit and a higher income to buy. First-time buyers face the biggest challenges in London where sales have fallen according to latest ONS data. The average household income of a first-time buyer in London is £100,000 and the average deposit required is £150,000 (ONS)." Story Continues He added that rising house prices, higher mortgage rates, and stricter mortgage regulations have made it more challenging for first-time buyers, particularly in southern England, and suggested that easing mortgage regulations could help reduce pressure on the rental market. Toby Leek, president of NAEA Propertymark, warned that many first-time buyers are being “priced out of cities” – particularly in London, where the dream of homeownership is slipping further out of reach for younger buyers. “Many first-time buyers are being priced out of cities, especially throughout London where they have grown up or have a desire to nest themselves,” Leek said. He pointed out that the average age of a first-time buyer has risen to 33.5 years, and the amount needed for a deposit is now averaging £50,000. “With the amount of money needed for a deposit continuing to rise, many people may find their homeownership aspirations hard to achieve.” While London’s share of first-time buyer mortgages continues to shrink, the South East of England has emerged as the region with the highest share of new homeowner sales in 2023, accounting for 13.8% of the market. Read more: Average UK house prices dip in February Across the UK, many areas have seen marked growth in the number of first-time buyer mortgages. In 2023, Dartford in the South East saw the highest rate of first-time buyer mortgages, with 20.2 sales per 1,000 dwellings, followed by Harlow in the East of England (16.3 per 1,000) and Nuneaton and Bedworth in the West Midlands (15.5 per 1,000). These areas also experienced some of the fastest growth rates in the decade leading up to 2023, with Harlow, Nuneaton and Bedworth, and Dartford all seeing increases of more than 30%. In Scotland, Wales, and Northern Ireland, first-time buyer mortgage sales are seeing faster growth, especially in rural and suburban areas. In Scotland, areas like South Lanarkshire, North and South Ayrshire, and West Dunbartonshire have seen growth rates above 35%. Metropolitan regions like Dundee, Glasgow and Edinburgh have had slower increases in first-time buyer activity, suggesting a growing disparity between urban and rural markets. Similarly, in Wales, regions like Newport and Torfaen have reported the strongest growth in first-time buyer sales, with rates increasing by more than 40% since 2013. Meanwhile, Cardiff, which had the highest rate of first-time buyer mortgages in 2013, has seen more modest growth, up just 8.6% over the past decade. In Northern Ireland, Belfast has seen solid growth, with the highest increase among devolved capitals, rising 27.9% from 2013 to 2023. However, Antrim and Newtownabbey have seen even higher growth rates of 37.7%. The trend of rising first-time buyer mortgage sales in rural areas and regions outside of major cities suggests that while the path to homeownership may be narrowing in traditional hotspots like London, opportunities are emerging in more affordable markets across the UK. Mark Eaton, chief operating officer at longer-term fixed rate lender April Mortgages, said: "“Getting on the property ladder in the capital is almost impossible on your own and most joint mortgage applicants still require huge deposits. “Our own research shows that a couple earning an average salary in the capital would need a deposit of over £200,000 to buy a home in nearly half of all London boroughs. “One solution is longer-term mortgages of 10-years or more, which reduce monthly repayments and help borrowers qualify for larger loan amounts. This could improve affordability and enable more first-time buyers to purchase in high-cost areas, but it won't fix the problem on its own. “The strongest first-time buyer activity is now outside London, particularly in the North East and Northern Ireland, where property remains more affordable.” Read more How renters can save up to buy their first home HSBC launches sub-4% fixed mortgage rate Most affordable places for single people to buy a UK home revealed Download the Yahoo Finance app, available for Apple and Android. View Comments |
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| 12.03.25 13:07:28 | Persimmon Full Year 2024 Earnings: Revenues Beat Expectations, EPS Lags | |
| Persimmon (LON:PSN) Full Year 2024 Results Key Financial Results Revenue: UK£3.20b (up 15% from FY 2023). Net income: UK£267.1m (up 4.6% from FY 2023). Profit margin: 8.3% (down from 9.2% in FY 2023). The decrease in margin was driven by higher expenses. EPS: UK£0.84 (up from UK£0.80 in FY 2023).LSE:PSN Earnings and Revenue Growth March 12th 2025 All figures shown in the chart above are for the trailing 12 month (TTM) period Persimmon Revenues Beat Expectations, EPS Falls Short Revenue exceeded analyst estimates by 6.4%. Earnings per share (EPS) missed analyst estimates by 2.9%. Looking ahead, revenue is forecast to grow 7.7% p.a. on average during the next 3 years, compared to a 7.1% growth forecast for the Consumer Durables industry in the United Kingdom. Performance of the British Consumer Durables industry. The company's shares are up 5.7% from a week ago. Risk Analysis You still need to take note of risks, for example - Persimmon has 1 warning sign we think you should be aware of. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
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| 11.03.25 09:06:47 | Persimmon raises building targets amid signals of housing market recovery | |
| Persimmon (PSN.L) has hiked the number of homes it thinks it can sell this year amid “positive tailwinds” from the Government’s planning reforms. The housebuilder said it had seen improving sales in the early part of 2025, and that it is targeting up to 11,500 homes this year. Companies like Persimmon have suffered a rough few years after a spike in inflation caused the Bank of England to raise interest rates. That made it more expensive for people to take out a mortgage, and in turn hammered the number of new homes companies built and sold. Interest rates began to fall last summer from their peak of 5.25%, and currently sit at about 4.5%, with further cuts expected this year. Completing 11,500 homes would be a significant improvement on the 10,664 Persimmon sold in 2024, and marks a upward trend from the year before when it did not even hit 10,000. It would still be far below the levels seen before interest rates rose, after the company sold more than 14,500 homes in 2021. Nonetheless, chief executive Dan Finch said the “underlying market fundamentals remain strong”. The fall in rates combined with improving wage growth and lagging house prices has made house buying marginally more affordable of late, especially for the cheaper end of the market where Persimmon operates. Richard Hunter, an analyst at Interactive Investor, said interest cuts have “clearly sparked the mortgage market into life, especially for first-time buyers where Persimmon has had a traditionally higher exposure”. The company has seen sales rates rise by about one-sixth across all of its sites in the first nine weeks of 2025, compared to the same period last year. And the company’s order book for private sales now stands about one-quarter higher than it did a year ago. Mr Finch also pointed to Labour’s attempts to get the UK building more homes, which have included changing planning rules to make it easier to get housing projects approved. Prime Minister Sir Keir Starmer has said he wants 1.5 million new homes built in the UK by the next election. Mr Finch said: “The Government’s welcome planning reforms and pro-housebuilding agenda demands more of the high-quality, affordable homes which are Persimmon’s core strength, providing a positive tailwind.” View Comments |
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| 26.02.25 10:10:01 | Persimmon (LON:PSN) Might Be Having Difficulty Using Its Capital Effectively | |
| To find a multi-bagger stock, what are the underlying trends we should look for in a business? In a perfect world, we'd like to see a company investing more capital into its business and ideally the returns earned from that capital are also increasing. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. Although, when we looked at Persimmon (LON:PSN), it didn't seem to tick all of these boxes. What Is Return On Capital Employed (ROCE)? If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. Analysts use this formula to calculate it for Persimmon: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.095 = UK£355m ÷ (UK£4.8b - UK£1.1b) (Based on the trailing twelve months to June 2024). Thus, Persimmon has an ROCE of 9.5%. On its own, that's a low figure but it's around the 8.2% average generated by the Consumer Durables industry. See our latest analysis for Persimmon LSE:PSN Return on Capital Employed February 26th 2025 Above you can see how the current ROCE for Persimmon compares to its prior returns on capital, but there's only so much you can tell from the past. If you're interested, you can view the analysts predictions in our freeanalyst report for Persimmon . The Trend Of ROCE On the surface, the trend of ROCE at Persimmon doesn't inspire confidence. Over the last five years, returns on capital have decreased to 9.5% from 35% five years ago. And considering revenue has dropped while employing more capital, we'd be cautious. If this were to continue, you might be looking at a company that is trying to reinvest for growth but is actually losing market share since sales haven't increased. In Conclusion... From the above analysis, we find it rather worrisome that returns on capital and sales for Persimmon have fallen, meanwhile the business is employing more capital than it was five years ago. Investors haven't taken kindly to these developments, since the stock has declined 43% from where it was five years ago. Unless there is a shift to a more positive trajectory in these metrics, we would look elsewhere. If you want to continue researching Persimmon, you might be interested to know about the 1 warning signthat our analysis has discovered. If you want to search for solid companies with great earnings, check out this freelist of companies with good balance sheets and impressive returns on equity. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
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| 19.02.25 06:00:21 | Four in five homebuyers to pay more stamp duty from April | |
| The cost of buying a home in the UK will rise for most homebuyers from April, with new analysis revealing that four in five homeowners England and Northern Ireland will pay more stamp duty. The 2% rate between £125,000 and £250,000 will return in April, in a blow to the UK property market. Currently, only 49% of homeowners are liable for stamp duty, but this proportion will surge to 83% once the revised rules take effect. As a result, many will face a higher stamp duty burden, amounting to an extra £2,500 on purchases that cost between £125,000 and £250,000. The changes will generate an additional £1.1bn annually for the government, according to property site Zoopla. Read more: Homeowners hit with £243 monthly rise at end of fixed-rate mortgages Only 17% will remain exempt from stamp duty after the changes, which will impact homeowners purchasing properties over £250,000. The changes will have different effects regionally, with the West Midlands seeing the largest increase, with the number of homeowners liable for stamp duty surging by 66%, followed by the East Midlands (55%) and the North West (50%). The impact will vary across the UK. In the North East just 7% of homeowners currently pay stamp duty, but this will rise to 40% from April. Meanwhile, homeowners in London face the highest stamp duty rates, with 97% of sales expected to be subject to the tax by April. The regions most affected by the return of the 2% band are the South West and Eastern England, where the percentage of sales paying stamp duty will increase by 41% and 21% respectively. First-time buyers will also see an increase in the proportion liable for stamp duty. Under current rules, 21% of first-time buyers pay stamp duty. However, by April 2025, this will double to 42%, with the increase most acutely felt by those purchasing homes in London and the South East. Purchases between £300,000 and £625,000 will see an increase in tax liability, with costs of up to £15,000 per purchase. Buying at £350,000 will cost £2,500 per purchase, up from £0 today. Buying a £500,000 home will cost £10,000 in stamp duty, up from £3,750 today and buying at £550,000 will jump from £6,250 to £15,000. Read more: Average UK house price rises to almost £368,000 Yet, 58% of first-time buyers will remain exempt from stamp duty on purchases of homes priced under £300,000, benefiting those buying in areas with lower property values, such as the North East and North West. The number of first-time buyers liable to pay stamp duty will be the lowest in the North East (2%), Yorkshire and the Humber (3%), Northern Ireland (5%) and the North West (5%). Story Continues Richard Donnell, executive director at Zoopla, said: “Stamp duty has become a big source of tax revenue, approaching £10bn a year for the government. The reduction in tax reliefs from April will see more homebuyers paying stamp duty.” Donnell added: “Existing homeowners will pay up to £2,500 more for each purchase across a large number of sales. The average seller has made £60,000 in capital gains, so there is flexibility to absorb this cost, but buyers will expect to factor this extra cost into what they offer. “It’s positive that most first-time buyers will still pay no stamp duty from April, but these changes hit those buying over £300,000 in southern England the hardest, where buying costs are already high. This will reduce buying power and market activity at a local level.” Read more: How to complete on a property before stamp duty deadline in March He also warned that stamp duty continues to be a major tax burden, particularly in southern England, where affordability challenges are already pressing. “The case for reforming stamp duty remains, but the question is where to replace the multi-billion-pound tax revenues,” Donnell said. Stamp duty applies in England and Northern Ireland. In Scotland — where the tax is referred to as land and buildings transaction tax — buyers are required to pay if the property's value is above £145,000, or over £175,000 for first-time buyers. In Wales, the stamp duty, known as transaction tax, applies to properties valued over £225,000. Read more: How to check your home’s Energy Performance Certificate 7 property planning trends of 2025 How to negotiate house prices Download the Yahoo Finance app, available for Apple and Android. Download the Yahoo Finance app, available for Apple and Android. View Comments |
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| 13.02.25 06:00:55 | UK property market hit by bond turbulence as demand cools | |
| Property buyer demand cooled in January, according to an industry survey by the Royal Institution of Chartered Surveyors (RICS), which said this could have been linked to the sell-off in bond markets and rising yields. The January RICS UK residential property survey suggested a broadly flat picture for house demand and sales. The professional body's survey showed that its indicator of new buyer enquiries had a net balance of zero in January, meaning interest in home buying neither increased nor decreased. Meanwhile, the survey indicator on agreed sales rose by a net balance of 3%, though RICS said this was "very marginal in term of growth". Read more: Most affordable places for single people to buy a UK home revealed Tarrant Parsons, head of market analytics at RICS, said: "The latest survey feedback indicates that growth in buyer demand lost a bit of momentum through the early part of the year, with this flatter picture likely linked to the turbulence seen across money markets in the first half of January." Concerns about stubborn inflation and sluggish economic growth – known as "stagflation" – in the UK, as well as rising levels of sovereign debt sparked a sell-off in government bonds. This has prompted a surge in the yields on these bonds, which are effectively the interest rates on this debt paid out as a return to investors, meaning the UK government's cost of borrowing also rose. Lenders typically look to gilt yields as a basis for setting their long-term lending rates, including fixed-rate mortgages. This means that when gilt yields rise, fixed mortgage rates also tend do so. Yields have since eased back, though they do remain elevated compared to where they stood in the middle of last year. The RICS survey showed that while the demand had cooled in January, the sales market was expected to heat up in the months ahead. The survey indicators for the three-month outlook for sales was up 10% and had a net balance of +30% for 12-months from now. Read more: Best credit card deals of the week, 12 February As for house prices, a net balance of +22% responses indicated rises over the month. Respondents firmly believed that house prices will continue to climb across the country in the coming year, with this survey indicator giving a net balance of +55%. Parsons said that the slightly positive near-term outlook for sales activity "should be further supported by the unwinding of some of the pressures around mortgage interest rates over the past couple of weeks." Sarah Coles, head of personal finance at Hargreaves Lansdown (HL.L) and Yahoo Finance UK personal finance columnist, said: "The bond market drama that hit in early January didn’t dramatically shift mortgage prices, but potential buyers fretted about what might happen next, and stayed home." Story Continues In fact, she said it turned out to be more of a "mini drama" in terms of mortgages, as the average two-year fixed rate rose from 5.48% at the start of the year to 5.52% but has fallen back to 5.48% this week. "The fact that it all blew over in a matter of weeks means any weakness is likely to be relatively short-lived," Coles said. "Meanwhile, the Bank of England rate cut last week is likely to reignite buyer enthusiasm." Read more: Bank of England governor Andrew Bailey issues stark warning over financial regulation changes The Bank of England (BoE) announced a 0.25% cut, lowering its base rate to 4.5%. BoE governor Andrew Bailey said policymakers would take a “gradual and careful approach” to interest rate cuts. In terms of the lettings market, RICS found that demand continued to falter with a +2% result from the survey. However, landlord instructions – which refers to landlords making property available for rent – continued to fall, with a survey result of -19%. "So despite demand recording broadly flat to marginal growth, further reductions in availability continues to increase the gap between supply and demand," RICS said. As for rents, a net balance of +23% believed they would continue to rise over the next three months. "The runaway growth of renter numbers abated a little at the start of the year, but the pressure isn’t off, because the number of properties they were fighting over fell again fairly significantly," said HL's Coles. She pointed out that HL's latest savings and resilience barometer showed renters had an average of just £62 left at the end of the month, compared to £303 for those with mortgages. "It means a rental hike could end up pushing millions of renters over the edge – forcing them to make incredibly difficult decisions about how to cut their costs to stay on track," she said. Read more: Is the UK government sitting on a bitcoin goldmine? Will gold prices hit $3,500 this year? Have your say Has DeepSeek impacted the appeal of Mag 7 stocks? Download the Yahoo Finance app, available for Apple and Android. View Comments |
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