Deregulation may mean little if planning remains under-resourced

Joey Gardiner comment pic 3

Housebuilder shares have dropped amid fears of interest rate rises in the wake of last Friday’s growth plan. Is Kwasi Kwarteng’s prescription for planning deregulation across 38 investment zones really likely to give the sector the long-term tonic it needs, asks Joey Gardiner?

As I write this, shares in blue chip housebuilders Taylor Wimpey and Persimmon are trading down around 8% below the level they were the moment before Kwasi Kwarteng stood up to make his much heralded not-Budget announcement, wiping about £600m off the value of the firms.

These are just two examples – all of the major housebuilders are trading strongly below where they opened on Friday morning, with investors clearly believing their medium-term prospects have been damaged by what the chancellor brought forward. And this is despite it including a raft of planning reforms, tax breaks designed to stimulate growth – including a £1.6bn a-year permanent stamp duty change directly targeting homebuyers – and other dedicatedly pro-growth reforms.

So, are the capital markets rights to be so gloomy about prospects for the residential sector from the government’s growth plan? What does it really all add up to?

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