UK housebuilder shares surge on revived first-time buyer support plan
British homebuilder stocks jumped after the government confirmed a new first-time buyer equity loan scheme, reviving a policy that expired in 2023.
British housebuilder shares rallied on Monday after the government confirmed it will introduce a new programme for first-time buyers in next month's budget, aiming to revive a sector weakened by soft demand and affordability pressures.
The policy revives the "Help to Buy" scheme that expired in 2023, and is intended to support economic growth while helping first-time buyers onto the property ladder. It could provide the biggest boost yet to a sector that has struggled through a prolonged downturn driven by high borrowing costs, inflation and weak demand.
Shares in building materials suppliers also climbed, as investors bet on stronger construction activity after years of sluggish building.
Homebuilders including Barratt Redrow, Bellway and Taylor Wimpey had urged the government to restore first-time buyer support, arguing that their own sales incentives had failed to lift demand substantially and had squeezed margins.
"It is important now that the Government moves quickly to implement the scheme," said Neil Jefferson, chief executive of the Home Builders Federation.
Barratt Redrow's new chief executive, Dean Banks, who took over last week, welcomed the initiative and called for it to be introduced as soon as possible.
The equity loan programme, announced on Saturday, will let first-time buyers borrow up to 20% of a home's value against a 2.5% deposit, with an initial interest-free period. The government also plans a household income cap to target support at those who need it.
By comparison, the previous Help to Buy scheme required a minimum 5% deposit against 20% government-backed equity loans, and offered a five-year interest-free period. Further details of the new programme will be set out in the budget next month.
The British homebuilders' index jumped 16% to its highest level since March 2026, though it remains at roughly half the level seen before a sharp slide that began in 2022. Shares in Persimmon, Barratt Redrow, Taylor Wimpey, Vistry and Berkeley Group rose between 6% and 23%, leading gains across London's indices.
UK building materials suppliers Ibstock, Forterra, Marshalls, Breedon and Topps Tiles rose between 5% and 20%. London's FTSE 250 midcap index, which includes a number of construction company shares, was up 1%, making it one of Europe's top-performing indexes on Monday.