Britain's housebuilders gained ground today after Boris Johnson pledged to “fix” the problem of unaffordable deposits and get more young people on the property ladder.
Barratt Developments, Persimmon, Taylor Wimpey and Berkeley all rose on the FTSE 100, while mid-cap construction companies such as Crest Nicholson, Morgan Sindall and Vistry also rose.
In an interview with The Daily Telegraph, published on Saturday, the PM said he was aiming to create “Generation Buy”, adding home ownership is “vital for our society”.
Mr Johnson has asked ministers to draw up plans to encourage mortgage lending to people who can only manage smaller upfront deposit payments.
Citi analyst Ami Galla said the proposed scheme is likely to replace Help to Buy, with the controversial scheme set to expire in 2023.
“While there are little details around the proposed idea, it signals government’s commitment to provide some form of high [loan-to-value] support to [first-time buyers],” she wrote in a note to clients.
The FTSE 100 rose moderately, with struggling engine-maker Rolls-Royce leading risers, climbing 9.8p to 123.4p. The group experienced something of a “dead cat bounce” after heavy losses over recent weeks. It has begun meetings with investors, offering senior unsecured notes, after its chief executive unveiled a long-awaited £5bn financing plan last Thursday.
Meanwhile, shares in consumer goods giant Reckitt Benckiser fell 180p to £74.92, after product-testing company Intertek poached the chief financial officer of its health arm. Jonathan Timmis will join Intertek as group CFO in April, replacing Ross McCluskey, who is moving to an operational role. Intertek shares were barely moved by the announcement, falling 34p to £64.06.
There were standout moves in both directions on the FTSE 250. Scottish engineering group Weir jumped 203.5p to £14.84, at one point soaring the most since 1999 after it announced plans to sell its oil & gas division to US giant Caterpillar. Proceeds from the sale, at an enterprise value of $405m (£312m), will be used to cut down Weir’s leverage. Liberum’s Ryan Gregory said the sale is the “final step” in converting Weir into a “pure play” mining technology group.
At the opposite end of the mid-caps, Cineworld plunged after confirming plans to close all its sites following the pushed-back launch of the latest James Bond film, No Time to Die. Analysts said the group can weather a sustained closure, but warned a prolonged shutdown could have a devastating effect on the cinema chain.
Sandwich maker Greencore was also among the biggest fallers on the FTSE 250, after it said profit slipped 40pc in the year to the end of September. The company has been hit by a decline in demand for “food-to-go” amid the pandemic.
On London’s junior market, recruitment group Staffline climbed 5.1p to 28.62p after announcing a pair of new business wins. It also welcomed the Chancellor’s plans to allow firms that have deferred VAT to make repayments in smaller quantities.