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Galliford Try has predicted more takeovers in housebuilding as smaller firms sell up before fresh taxation rules come into force.

Frank Nelson, the company鈥檚 financial director, was speaking as it continued its march north with the 拢9.3m acquisition of Kendall Cross in Newcastle upon Tyne.

Nelson said: 鈥淲e are seeing huge opportunities. A combination of the tough housing market and the changes to Capital Gains Tax (CGT) have opened things up a lot.

鈥淭his deal was not activated by the tax issue as we had been talking for months but there are certainly a lot more opportunities coming across our desk in terms of acquisitions and that is being driven mostly by the changes to the tax regime.鈥�

We are seeing huge opportunities. The tough market and CGT changes have changed things a lot

Frank Nelson, financial director

The government intends to scrap 鈥渢aper relief鈥� and impose a flat tax rate of 18% on all capital gains. Taper relief gives investors a favourable rate of 10% on profit made from selling on stakes in companies, provided they hold them for at least two years.

The changes to CGT are also believed to be behind the move by members of the Miller family to dispose of their holdings in the Scottish housebuilder.

Nelson said: 鈥淲e wouldn鈥檛 normally be looking to buy a regional builder but Kendall Cross is involved in affordable housing and operating in an area in the North where we are not operating so they were attractive.鈥�

The Newcastle contractor and affordable housing specialist reported 拢1.6m profit on 拢23.3m turnover for the year ending May 2007. The management team will remain in place.