British housebuilder stocks jumped on Monday after the government confirmed plans for a new equity loan programme for first-time buyers, to be introduced in next month’s budget. The scheme would see the state lend part of a buyer’s deposit or purchase cost, reducing the mortgage a first-time buyer needs to take on.
Persimmon (LON: PSN), Barratt Redrow (LON: BTRW), Taylor Wimpey (LON: TW.), Vistry (LON: VTY) and Berkeley Group (LON: BKG) all rose, with gains across the five ranging from 6% to 23%.
The London-listed homebuilders’ index, which tracks the sector, jumped 16% to its highest level since March, leading gains across UK markets. London’s FTSE 250 midcap index, home to several of the housebuilders, was up 1% and among the top-performing indexes in Europe on the day.
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The move revives a policy last seen under Help to Buy, the previous first-time-buyer support scheme that expired in 2023 and whose absence builders including Bellway, Berkeley and Taylor Wimpey had urged the government to address, citing affordability pressure from higher mortgage rates and geopolitical uncertainty.
The scale of the potential demand boost helps explain the size of the share moves. Sam Cullen, an analyst at broker Peel Hunt, expects about 20% of deals to be supported by the scheme and a 10% uplift in sales volumes in 2028.
That forecast helps explain why the reaction has been so sharp across the sector rather than confined to one name: a scheme supporting a fifth of transactions would reach deep into the demand housebuilders have lost since Help to Buy ended. Full mechanics of the new scheme, including deposit terms and eligibility, are due with the budget next month.
