LIVE MARKETS-UK budget: good news for real estate stocks, UBS says

Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com.

UK BUDGET: GOOD NEWS FOR REAL ESTATE STOCKS, UBS SAYS

Britain's real estate stocks, highly sensitive to the gilt market, got a lift from finance minister Rachel Reeves' budget with the sector set to record its biggest weekly increase in five weeks. .FTUB3510

"The positive gilt market reaction and easing of risk have lifted the whole sector," writes UBS. GB/

No adjustments to commercial property stamp duty and higher council tax bands now set above 2 million pounds, means the impact on UBS coverage - which includes Land Securities Group LAND.L, Segro SGRO.L, British Land Company BLND.L, Great Portland Estates GPEG.L, Hammerson HMSO.L - will be negligible, even for companies with some residential exposure, they say.

The Swiss bank expected the budget to set the new higher rate for the business rates multiplier for leases above £500,000, which could have been up to 10p in the pound above the standard rate.

But the outcome was substantially better, with the higher rate set at just 2.8p above the standard multiplier.

On the residential side, they see some indirect benefit for REITs with sector exposure, as the higher rates of income tax on private landlords are likely to push more private landlords out of the sector.

This would further reduce the supply of rental homes and continue to inflate rents.

"If private landlords do exit the market, we think the pressure on government to bring forward PRS (private-rented sector) developments through more favourable policies could increase".

(Joice Alves)

EARLIER LIVE MARKETS POSTS:

LESSONS FOR THE EURO ZONE FROM BRITAIN'S BUDGET CLICK HERE

PRETTY CALM - FOR NOW CLICK HERE

EUROPE BEFORE THE BELL: THANKFUL FOR A QUIETER DAY? CLICK HERE

MORNING BID: IS THE DOLLAR HEADED FOR THE CARVERY? CLICK HERE