UK house builders bore the brunt of the Chancellors budget after he removed tax relief for buy-to-let investors – potential reducing the amount of homes that are purchased for investment purposes.
The UK’s leading homebuilders typically sell many new homes off plan, often to those that are making an investment.
Osborne said his desire to create a fairer housing market was the motive for introducing the changes.
Barratt Developments, Persimmon and Taylor Wimpey were the FTSE 100’s top fallers and The FTSE 350 House builder’s index was the biggest sector faller.
Home builders have enjoyed significant support from the government in the last few years and this is the first major negative intervention to the house builders the Tories have made.
The Tories have said they would like more people to own a home but there may be the unintended consequence of higher rents for lower income households.