UK housebuilder shares jump on new first-time buyer scheme

British housebuilder stocks climbed sharply on Monday after the government confirmed it will introduce a new support scheme for first-time buyers in next month's budget, offering relief to a sector weighed down by weak demand and affordability pressures.

The policy, named 'Your First Home', is a successor to the 'Help to Buy' scheme that ended in 2023. It is designed to help first-time buyers get onto the housing ladder and to support economic growth. The government is expected to set out the programme's detailed design in the budget.

The index tracking British homebuilders rose 16% to its highest level since March 2026, though it remains roughly half the level recorded before a steep sector selloff began in 2022.

Analysts said companies including Persimmon, MJ Gleeson, Barratt Redrow, Bellway and Taylor Wimpey are likely to gain the most, as they tend to sell lower-priced homes. Shares in building materials suppliers also advanced, with Ibstock, Forterra, Marshalls, Breedon and Topps Tiles rising between 5% and 20%.

The chief executives of Barratt, Taylor Wimpey and Vistry all welcomed the policy. Neil Jefferson, CEO of the Home Builders Federation, said it was important for the government to move quickly to implement the scheme.

Builders have long contended that support for first-time buyers is essential to reviving sales, arguing that company-funded incentives have squeezed margins without meaningfully lifting demand.

The Labour government has pledged to build 1.5 million homes by 2029 and has introduced planning reforms and affordable housing funding measures to speed up development. Analysts, however, have said progress so far has been modest and the target is unlikely to be met.

Homebuilders and building materials suppliers are among the most shorted stocks in Britain, suggesting Monday's rally was at least partly driven by investors closing bearish positions. Shorting involves borrowing shares and selling them in the hope of buying them back more cheaply.

According to Financial Conduct Authority data from last week, bricks and concrete maker Ibstock had a net short position of 16.2% and Vistry 15.6%, making them the most shorted UK-listed stocks. Crest Nicholson, Taylor Wimpey, Persimmon, Barratt and Travis Perkins had short interests ranging from 7.5% to 11.5%.