Housebuilders was one of the sectors to see the biggest bump after the Budget as the Chancellor fleshed out the government’s spending plans for the sector though this faded rapidly on reflection.
One concern, highlighted by the Office for Budget Responsibility, is that on its forecasts mortgage rates will rise through to 2027 due to five-year fixes and the impact of the cost of borrowing of the huge spending programme announced today.
Having been up 2% shortly after the Chancellor sat down, Persimmon PLC (LSE:PSN), Taylor Wimpey and Barratt were all in the red nearing the close.
In the Budget speech, the headline number was a £5 billion commitment to housebuilding with the majority of the cash heading towards affordable and social housing.
It was in line with previous government commitments to build 1.5 million new houses over the life of this parliament plus an extra £500 million boost to the Affordable Homes Programme.
Build-to-rent will also get a £3 billion boost from housing guarantee schemes, but the Right to Buy scheme will be scaled back and local authorities entitled to retain all receipts generated from sales.
Existing mortgage guarantee schemes that offer 95% mortgages through state-backed loans will be kept but be subject to a review to conclude in spring 2025.
On cladding, more than £1 billion is being made available to accelerate the removal of dangerous cladding from homes.