Market Report: Savills suffers from tax crackdown on top homes


Punters in Savills were cursing George Osborne yesterday. The estate agent, which focuses on the high end section of the market, was one of the stocks worst-hit by the Budget after the Chancellor announced he was upping the amount of tax on homes being sold for more than £2m.

As well as the increase in stamp duty, he also closed a loophole by introducing a 15 per cent tax on upmarket properties being bought through a company. Amid fears that the measures would hit its trading in the UK, Savills was knocked back to a session low of 363.46p, although by the bell it had managed a slight recovery, eventually closing 9.2p worse off at 373p.

Although the stamp duty changes means a housebuyer will have to fork out an extra £40,000 for a home worth £2m, not everyone was convinced it was a major blow. "For those people who are playing in that sphere of the property market, the difference probably won't change their thought process," said one City voice.

The housebuilders, meanwhile, were finding reasons to cheer the budget. Barratt Developments and Bovis Homes powered up 6.3p to 148.8p and 15.6p to 508.5p respectively following confirmation that the Get Britain Building fund is getting another £150m pumped into it.

A new duty on gaming machines was not taken well by the bookies. William Hill was pegged back 5.3p to 243.1p while Ladbrokes closed 3.5p lower at 152.5p, with Peel Hunt's Nick Batram saying the 20 per cent tax rate was "very much towards the top end" of expectations.

However, although smokers will not have been happy about the decision to raise the price of a pack of cigarettes by 37p, that did not stop Davidoff-owner Imperial Tobacco puffing up 64p to 2,558p and rival British American Tobacco shifting 32p higher to 3,229p.

The FTSE 100 itself had little reaction to the Budget, as it edged up 0.54 points to 5,891.95 despite having plummeted 70 points on Tuesday, with disappointing housing data from the States also not helping matters.

Weir Group was the main faller, sliding 6.21 per cent to 1,859p after investors were spooked by a profit warning from the pump maker's rival Baker Hughes. Particularly worrying for the engineer was the US group's admission that its pressure pumping operations were suffering from both raw material shortages and pressures on pricing, although the severity of Weir's move was also being put down to a high level of short interest in the stock.

Forecast-beating fourth-quarter figures from Sainsbury's left it at the top of the benchmark index as it advanced 13.8p to 319.3p, although rival supermarket Tesco failed to follow, easing back 0.45p to 332.3p.

ITV was lifted 0.3p to 87.15p after once again finding itself the subject of bid talk. Panmure Gordon's Alex DeGroote announced that, having screened the media companies for potential takeover candidates, the broadcaster was one of the stocks most closely fitting the criteria for being a possible target.

Saying he "fully [expects] M&A to be a market driver this year" in the sector, the analyst also highlighted the publisher Informa and ad agency Aegis. They ticked up 4p to 440p and 1.8p to 182.8p respectively, with the latter getting an additional boost from Exane BNP Paribas raising its rating to "outperform".

Ocado slid back 4.5p to 118.8p on the FTSE 250 following the re-emergence of the online grocer's arch-nemesis Philip Dorgan, the Panmure Gordon analyst who once said "Ocado starts with an 'o', ends with an 'o' and is worth zero".

He reiterated his "sell" advice and 50p price target, warning that – with the online grocer searching for a replacement for Andrew Bracey, who quit as chief financial officer in January – "a new finance director will be keen to rebase forecasts".

He also highlighted the fact that Ocado has recently been offering free six-month trials of its Delivery Pass scheme – not, he said pointedly, "helpful to profitability".

Dixons topped the mid-tier index by shifting up 1.33p to 18.8p – meaning its share price has added nearly a third in just eight sessions – after Espirito Santo's scribblers changed their rating to "buy". The electronics chain was also continuing to be helped by the troubles at Game, whose shares were suspended on the fledgling index as it headed for administration.

Investors responded to APR Energy's admission late on Tuesday that it is delaying its results, which were due today, until next month by pushing the temporary power firm down 19.64 per cent to 884p.

Down on the small-cap index, vague speculation suggesting Premier Foods could be a bid target for Kraft did the rounds in early trading. However, the far-fetched idea was rubbished by traders following news of a number of share dealings by directors of the troubled Hovis-owner, which finished 0.5p higher at 12.5p.

Start your day with The Independent, sign up for daily news emails
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power