UK housebuilder stocks surge on Help to Buy extension reports
UK housebuilder stocks surged this morning on reports that the government is preparing to extend the Help to Buy scheme.
Barratt Developments’ share price was up 5.07 per cent and Berkeley Group’s shares jumped 4.07 per cent this morning.
Taylor Wimpey’s share price increased 3.29 per cent and Persimmon’s stock was up 4.06 per cent.
The Help to Buy scheme will be extended beyond its December deadline to help buyers that had deals delayed due to lockdown, the Financial Times reported.
The closure of construction sites during the coronavirus lockdown means many homes could be built too late for the December cut off.
An announcement on the extension could be made as soon as Friday.
Help to Buy allows buyers to pay for a new-build home with a deposit as small as five per cent, with the government providing a 20 per cent loan, or 40 per cent in London.
Homes sold through the scheme have accounted for a large chunk of UK housebuilder sales since it was set up seven years ago.
UK housebuilders have also been buoyed by the chancellor’s decision to increase the threshold for stamp duty payments.
“The housebuilders are helping to prop up the FTSE 100 in early trade today, with investors jumping into a sector that has historically benefitted from each post-crisis period,”Joshua Mahony, senior market analyst at IG, said.
“With the recent stamp duty holiday expected to spark a resurgence in demand, speculation over the potential measures such as a help-to-buy extension adds yet another string to the bulls bow.”
CMC Markets analyst David Madden added: “Construction sites ground to a halt amid the health crisis so if the scheme is pushed back, that will assist people who were impacted by the delays.”