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March 1, 2021, 5:49 a.m. EST

U.K. home builders rally on reports of new 5% down-payment program

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By Steve Goldstein

Shares of leading U.K. home builders surged on Monday, on reports the U.K. government will again try to boost homeownership from those struggling to get on the housing ladder.

Leading builders including Persimmon /zigman2/quotes/206444744/delayed UK:PSN +1.04% , Barratt Developments /zigman2/quotes/209812640/delayed UK:BDEV +0.10% , Taylor Wimpey /zigman2/quotes/208623755/delayed UK:TW +1.29% , Bellway /zigman2/quotes/208360300/delayed UK:BWY +0.27% , Crest Nicholson /zigman2/quotes/207992108/delayed UK:CRST -1.04% and Vistry /zigman2/quotes/208587963/delayed UK:VTY +1.35% each rose between 5% and 7%.

U.K. media reported that Chancellor of the Exchequer Rishi Sunak is set to announce a new mortgage guarantee that will allow buyers with as little as a 5% deposit buying homes up to £600,000. Sunak will deliver the new budget on Wednesday.

In London, the average home price is nearly £500,000, requiring a £75,000 deposit on a typical mortgage. The average salary in London is less than £40,000.

Analysts at Jefferies said the new program sounds similar to the Help to Buy mortgage assistance program that ran from 2013 to 2017, and saw just over 100,000 guarantees over four years — never more than 4% of total transactions.

The broader FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.76% rose 1.6%, joining the global rally on Monday after a difficult week in which investors focused on rising bond yields.

The yield on the 10 year gilt /zigman2/quotes/211347177/realtime BX:TMBMKGB-10Y -2.45% , which touched as high as 0.83% last week, was 0.79%. The U.S. 10-year /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y +0.59% yielded 1.44%.

/zigman2/quotes/206444744/delayed
UK : U.K.: London
3,199.00 p
+33.00 +1.04%
Volume: 543,567
May 7, 2021 4:35p
P/E Ratio
16.03
Dividend Yield
7.35%
Market Cap
£10.10 billion
Rev. per Employee
£637,483
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/zigman2/quotes/209812640/delayed
UK : U.K.: London
780.60 p
+0.80 +0.10%
Volume: 3.31M
May 7, 2021 4:36p
P/E Ratio
19.77
Dividend Yield
0.96%
Market Cap
£7.93 billion
Rev. per Employee
£513,779
loading...
/zigman2/quotes/208623755/delayed
UK : U.K.: London
180.75 p
+2.30 +1.29%
Volume: 7.05M
May 7, 2021 4:35p
P/E Ratio
30.74
Dividend Yield
2.29%
Market Cap
£6.51 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/208360300/delayed
UK : U.K.: London
3,670.00 p
+10.00 +0.27%
Volume: 224,205
May 7, 2021 4:35p
P/E Ratio
24.83
Dividend Yield
2.32%
Market Cap
£4.51 billion
Rev. per Employee
£770,301
loading...
/zigman2/quotes/207992108/delayed
UK : U.K.: London
418.20 p
-4.40 -1.04%
Volume: 430,711
May 7, 2021 4:35p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
£1.08 billion
Rev. per Employee
£1.03M
loading...
/zigman2/quotes/208587963/delayed
UK : U.K.: London
£ 1,280.50
+17.00 +1.35%
Volume: 606,877
May 7, 2021 4:35p
P/E Ratio
36.86
Dividend Yield
0.02%
Market Cap
£2.80 billion
Rev. per Employee
£603,708
loading...
/zigman2/quotes/210598409/delayed
UK : FTSE UK
7,129.71
+53.54 +0.76%
Volume: 605,971
May 7, 2021 4:59p
loading...
/zigman2/quotes/211347177/realtime
add Add to watchlist BX:TMBMKGB-10Y
BX : Tullett Prebon
0.78
-0.02 -2.45%
Volume: 0.00
May 7, 2021 5:00p
loading...
/zigman2/quotes/211347051/realtime
add Add to watchlist BX:TMUBMUSD10Y
BX : Tullett Prebon
1.58
+0.0093 +0.59%
Volume: 0.00
May 7, 2021 4:55p
loading...

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