Shares in the biggest housebuilders rose on hopes that Labour’s plan to boost construction in the Green Belt will boost the sector.
City analysts predicted the party’s landslide election victory would pave the way for a raft of changes that would make life easier for developers.
In a watershed moment in British political history, Keir Starmer’s party returned to government for the first time in 14 years.
Labour has pledged to build 1.5 million new homes in the next parliamentary term, or 300,000 a year.
Such plans to reform the planning system and build more affordable housing across the country and in the Green Belt could benefit the sector.
Plans: Labour has pledged to build 1.5 million new homes in the next parliament – or 300,000 a year
The party has promised to overhaul planning rules and free up what Starmer and his finance minister Rachel Reeves describe as low-quality ‘grey belt’ land from the green belt.
Labour also made plans to build a generation of new towns or expand cities where there is a housing shortage.
Among the blue-chips, Vistry Group rose 3.4 percent, or 43p, to 1,302p, Persimmon rose 2.2 percent, or 32p, to 1,464p, Taylor Wimpey rose 2.8 percent, or 4.2p, to 153p and Berkeley Group rose 2.2 percent, or 102p, to 4,826p.
Redrow also made a profit in the second tranche (up 2.4 percent, or 17p, to 714p).
Dan Coatsworth, investment analyst at broker AJ Bell, said: ‘Labour now has time to adapt and refine its strategy, but investors can be impatient, even at the best of times. If we don’t get positive results by 2025, sentiment could turn sour.’
Data from Halifax also shows that house prices rose by 1.6 per cent year-on-year in June, but fell slightly month-on-month. The average UK home now costs £288,455.
On the broader market, the FTSE 100 was down 0.5 percent or 37.33 points at 8203.93 and the FTSE 250 was up 0.9 percent or 176.31 points at 20786.65.
London’s second tier, which is more dependent on the UK economy, recorded its best weekly performance since mid-May.
An upbeat outlook from Goldman Sachs added to the feelgood factor. The US bank raised its growth forecast for the UK and said the FTSE 250 could benefit from a Labour government.
Another gainer was Close Brothers after analysts at Deutsche Bank gave it a positive rating.
The broker expects the company’s share price to recover after a huge sell-off earlier this year. Close Brothers had warned it could pay millions in compensation as the financial watchdog investigates its motor finance division.
The share price, which has fallen almost 40 percent this year, rose 4.7 percent, or 21.4p, to 477p.
Across the Atlantic, Wall Street returned to trading in good shape after Independence Day after the U.S. added 206,000 jobs in June. The figures, which were higher than expected but lower than the previous month, raised hopes that the Fed will cut interest rates later this year.