Housebuilder shares have soared after Prime Minister Andy Burnham announced a new Help to Buy scheme, which is hoped to boost the UK’s construction sector. FTSE 100 housebuilders Persimmon and Barratt Redrow jumped 15 and 13 per cent in early trading on Monday, contributing to early gains for the blue-chip index.
FTSE 250-listed Vistry saw the largest increase, with its shares rising by more than 22 per cent. Mid-cap builders Taylor Wimpey and Bellway also saw jumps of 15 and 14 per cent respectively.
The government's new "Your first home" scheme is designed to offer first-time buyers a 20 per cent equity loan towards a 2.5 per cent deposit, including an initial interest-free period. Prime Minister Burnham stated the programme aims to help young people access the housing ladder.
Commentators suggest the primary goal of the policy is to support struggling housebuilders by increasing demand, particularly as the Iran war reportedly pushes up building costs and reduces consumer confidence. Housebuilders, including the Home Builders Federation, have welcomed the scheme, with Barratt Redrow CEO Dean Banks noting it will help young people and give builders confidence to invest.
The government is expected to announce further details of the new scheme at the Budget. Changes from the original Help to Buy programme, which ran from 2013 to 2022, are anticipated to better target support.