Housebuilders buoyed by £5 billion fund for new homes

The Treasury’s £5 billion plans to boost housebuilding lifted shares in the UK’s biggest players amid hopes of tackling the UK’s “chronic” housing shortage.

Housebuilding shares have been ravaged by the Brexit vote but Chancellor Philip Hammond and Business Secretary Sajid Javid have unveiled a £2 billion fund to speed up building by using public land as well as a £3 billion loan pot for the smaller housebuilders frozen out of the market by a lack of bank funding since the financial crisis.

The Government also plans to relax planning rules with a presumption in favour of residential development.

News of the extra stimulus — as well as the likelihood of further Bank of England rate cuts — lifted a host of quoted firms by up to 2% today. Barratt Developments rose 4.9p to 499.2p, Taylor Wimpey added 2.8p to 156.9p, and Bovis Homes cheered 11p to 886p.

Alan Brown, chief executive of the sector’s biggest private player, Cala Homes, said: “This is very good news. People forget that we have a chronic housing shortage, we’re short of a million houses. Unless we as an industry and an economy get this solved, we are going to have some significant social problems going forward.”