MARKET REPORT: Housebuilders boosted by 1.5m new properties plan
Shares in the biggest housebuilders jumped amid hopes Labour’s plan to ramp up construction on the green belt will deliver a boost to the industry.
The party’s landslide election victory has cleared the way for a raft of changes that will make life easier for developers, City analysts have predicted.
On a watershed day in British political history, Keir Starmer’s party returned to government for the first time in 14 years.
Labour has promised to build 1.5million new homes over the next parliament – or 300,000 a year.
Such plans to reform the planning system and build more affordable homes across the country and on the green belt could benefit the sector.
Plans: Labour has promised to build 1.5m new homes over the next parliament – or 300,000 a year
The party has vowed to overhaul planning rules and release what Starmer and his Chancellor Rachel Reeves have described as low-quality ‘grey belt’ land from the green belt.
Labour also set out plans to build a generation of new towns or extensions to major cities where there are housing shortages.
Among the blue-chips, Vistry Group rose 3.4 per cent, or 43p, to 1302p, Persimmon added 2.2 per cent, or 32p, to 1464p, Taylor Wimpey climbed 2.8 per cent, or 4.2p, to 153p and Berkeley Group ticked up 2.2 per cent, or 102p, to 4826p.
There were also gains in the second tier for Redrow (up 2.4 per cent, or 17p, to 714p).
Dan Coatsworth, investment analyst at broker AJ Bell, said: ‘For now, Labour has a period of grace to settle into office and fine-tune its strategy, but investors can be impatient at the best of times and failure to produce positive results as we move into 2025 could see sentiment start to shift.’
Data from Halifax also showed house prices rose 1.6 per cent year-on-year in June but dipped slightly on a monthly basis, with a typical UK home priced at £288,455.
On the wider market, the FTSE 100 fell 0.5 per cent, or 37.33 points, to 8203.93 and the FTSE 250 rose 0.9 per cent, or 176.31 points, to 20786.65.
London’s second tier – which is more exposed to the UK economy – clocked up its best weekly performance since mid-May.
An upbeat outlook from Goldman Sachs added to the feel-good factor. The US bank increased its growth forecast for the UK and said the FTSE 250 could benefit under a Labour government.
Another riser was Close Brothers after analysts at Deutsche Bank issued a positive rating.
The broker expects the company’s share price to bounce back following the huge sell-off earlier this year. Close Brothers had warned it could pay out millions in compensation as its motor finance division is being probed by the financial watchdog.
The stock, which has fallen nearly 40 per cent this year, rose 4.7 per cent, or 21.4p, to 477p.
Across the Atlantic, Wall Street returned to trading in fine form following Independence Day after the US added 206,000 jobs in June. The figures, which were higher than expected but below the previous month, have sparked hopes that the Fed will cut interest rates later this year.
