UK housebuilder shares rally on help for first-time buyers

By Raechel Thankam Job and Simone Lobo Sept 28 (Reuters) - British housebuilder stocks surged on Monday after the government confirmed plans for a new first-time buyer support scheme in next month's budget, boosting a sector battered by weak demand and affordability pressures. The 'Your First Home' policy, a successor to the 'Help to Buy' scheme that ended in 2023, is intended to help first-time buyers onto the housing ladder and support economic growth. The move could mark the biggest boost yet for a sector hit by high borrowing costs, inflation and weak demand.

Builders have long argued that support for first-time buyers is critical to reviving sales, as company-funded incentives have weighed on margins without substantially lifting demand. The stock index for British homebuilders jumped 16% to its highest level since March 2026, although it remains about half the level seen before a sharp sector selloff began in 2022. Analysts said companies including Persimmon, MJ Gleeson, Barratt Redrow, Bellway and Taylor Wimpey were likely to benefit most from the scheme because they tend to sell lower-priced homes.

Building materials shares also gained, with Ibstock, Forterra, Marshalls, Breedon and Topps Tiles rising between 5% and 20%. The CEOs of housebuilders Barratt, Taylor Wimpey and Vistry all welcomed the policy. "It is important now that the Government moves quickly to implement the scheme," said Neil Jefferson, CEO of the Home Builders Federation.

The Labour government has pledged to build 1.5 million homes by 2029 and has introduced planning reforms and affordable housing funding measures aimed at accelerating development. However, analysts have said progress so far has been modest and the target is unlikely to be met. Detailed design features of the new programme will be unveiled in next month's budget.

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 stocks involves borrowing shares and selling them, with the aim of buying them back more cheaply to make a profit. Bricks and concrete maker Ibstock's net short position stood at 16.2% and Vistry's at 15.6%, making them the most shorted UK-listed stocks, according to Financial Conduct Authority data from last week.

Crest Nicholson, Taylor Wimpey, Persimmon, Barratt and Travis Perkins had short interests ranging from 7.5% to 11.5%. (Reporting by Danilo Masoni and Simone Lobo. Writing by Yadarisa Shabong. Editing by Rashmi Aich, Louise Heavens and Mark Potter)

Source: Euronext Markets