Housebuilder shares soar on Burnham council housing plans

Shares in the UK's largest housebuilders surged on Tuesday following Andy Burnham's announcement of plans to invest £10 billion in affordable housing. Prime Minister Burnham revealed the initial funding would be used to construct "thousands more quality council, social and affordable homes," prioritizing genuinely affordable homes for those waiting the longest for social rent.

This announcement followed a slowdown in Britain's housing market and sparked a significant boost in the shares of prominent London-based builders. Vistry, once the most-shorted stock in the UK, saw a 12% rise, reaching 301p in early trading, as it received £350 million to build 3,000 affordable homes as part of the £10 billion tranche.

Despite Burnham's initial plan to dedicate all £39 billion in the social and affordable homes program to council homes, the government has now allocated the funds for a mix of subsidised housing types. The £10 billion funding will be spent on building 70,000 homes outside London, with about 60% of the money earmarked for social rented housing, and an additional £6 billion for housebuilding in the capital.

Vistry's chief executive, Adam Daniels, hailed the funding as "a much-needed stimulus" for the sector, which has been grappling with falling demand and rising costs due to the Iran war.