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Adrian Kearsey, an analyst at the broker Panmure Liberum, notes there are still few details on how exactly the scheme will work. He wrote this morning:
Conversations with housebuilders over the weekend indicated that while they welcomed the news, they recognise the need to discuss the practicalities of implementation in the coming weeks.
At this stage it is unclear what the income and property value caps are going to be. Even if they are relatively generous, it is likely that higher price point developers (such as Berkeley Group, not rated) benefit as much.
At this stage it is unclear what level of financial contribution the housebuilders will be required to make to participate in the scheme. If this hurdle is too high, then developer take up may be limited. Moreover, even a moderate contribution may preclude those housebuilders with stretched balance sheets (e.g. Crest Nicholson).
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