Shares in the UK's largest housebuilders saw a sharp increase on Tuesday morning following Prime Minister Andy Burnham's announcement of an initial £10bn plan for affordable housing. The funding package, revealed on Monday evening, is designated to build "thousands more quality council, social and affordable homes".
The Prime Minister stated that the funding would be used for "genuinely affordable homes, most of them for social rent, in the places where families are waiting longest." This initial £10bn is part of a broader £39bn social and affordable homes programme, with this first tranche set to build 70,000 homes outside London. Approximately 60 per cent of this money is earmarked for social rented housing.
Following the announcement, shares in London's listed housebuilders rose. FTSE 250 firm Vistry saw its shares jump by over 12 per cent to 301p in early trading, while Barratt Redrow and Persimmon led the FTSE 100. Vistry informed investors it had received £350m to construct 3,000 affordable homes as part of this initial funding. A further £6bn is planned for housebuilding in London at a later date.