Housebuilder stocks jump after Burnham unveils £10bn council housing fund

Andy Burnham disclosed on Monday evening that the government will allocate an initial £10bn to accelerate the construction of council, social and affordable homes across the country. The money is earmarked for projects that deliver “genuinely affordable homes, most of them for social rent, in the places where families are waiting longest,” according to the Prime Minister’s statement.

Government funding boost

The package is set to fund 70,000 homes outside the capital, with roughly 60 per cent destined for social rent. A further £6bn will be reserved for London at a later stage. While the original Labour proposal called for the entire £39bn social‑housing programme to be dedicated to council homes, the latest plan adopts a mixed‑type approach, mirroring earlier commitments from former leader Sir Keir Starmer.

Market reaction

Investors responded positively, with the FTSE 250’s Vistry soaring more than 12 per cent to 301p in early trade. The firm said it has secured a £350m grant to deliver 3,000 affordable homes under the first tranche. Barratt Redrow and Persimmon led gains in the FTSE 100, while Berkeley added two per cent after recent land‑buying cuts.

We are delighted that Homes England has made this significant announcement that will create over 73,000 new homes and provide Vistry, its partners and the wider sector with a much‑needed stimulus,

Adam Daniels, chief executive of Vistry, said the funding will help the company play a large role in what he described as “the biggest council housebuilding programme since the postwar period”.

Outlook for housebuilders

Despite the rally, builders remain cautious. Barratt Redrow warned of “heightened macroeconomic uncertainty” and announced a slowdown in land acquisitions. Earlier this year, the sector faced pressure from rising material costs linked to the Iran conflict and a broader slowdown in the UK housing market.

Industry groups have also urged the mayor to consider cutting stamp duty for first‑time buyers, a move they argue could stimulate demand. The reaction to Burnham’s plan suggests that targeted public investment still carries weight in a market seeking fresh impetus.