UK housebuilders rise as Cameron throws weight behind mortgage scheme
LONDON (Reuters) - Britain's housebuilding sector rallied on Monday after Prime Minister David Cameron threw his weight behind a mortgage guarantee programme, lifting shares in homebuilders Persimmon, Bellway and Taylor Wimpey.
Cameron on Saturday brought forward the launch of "Help to Buy" aimed at helping people who have been frozen out of the property market, a surprise move which defied expectations that the scheme could be watered down amid risks of a housing bubble.
Persimmon topped Britain's bluechip climbers on Monday, adding 2.3 percent, while smaller rivals Bellway, Taylor Wimpey and Barratt were up 3.7 percent, 3.2 percent and 2.5 percent respectively, putting them amongst the biggest risers on the midcap index.
The announcement added 310 million pounds to the market value of the four companies.
Help to Buy was originally launched to help buyers of new properties and the second phase, originally due to start in January, was designed to assist buyers who might otherwise be unable to afford a down payment on a home.
The latest phase will now start on October7, a government source said.
Analysts at Jefferies said the Prime Minister's move to bring forward the scheme was positive, particularly given their earlier expectations that "Help to Buy" could be scaled back, something which had been weighing on share prices.
"We view this news as a positive catalyst for all companies with exposure to UK housing transactions and would expect share prices in the UK homebuilding and estate agency sectors to make up the ground they have recently lost," they said.
Liberum capital analyst Charlie Campbell said it was significant that the scheme was now being championed by the prime minister as well as the chancellor, George Osborne, who had originally launched the idea.
"It means that the policy's become much more important to the government...therefore the chance of them pulling it in whatever way is much smaller. That's helpful to the whole industry," he said.
The sector was helped further by positive data on British mortgage approvals earlier on Monday, which hit their highest level in more than five years last month, and a sector update by JP Morgan.
(Reporting by Sarah Young)
- Tweet this
- Share this
- Digg this
- Hundreds still missing in deadly Korea ferry sinking |
- Separatists take armoured vehicles, humiliating Ukraine forces |
- Battle over Scottish independence slightly tightens in new poll
- Ocean floor search for missing Malaysia plane cut short again |
- Tesco to step up price cuts as CEO defies pressure to quit |