Shares in UK housebuilders surged on Monday after the government announced a new Help to Buy scheme, providing a significant boost to an industry struggling with a prolonged housing market slowdown. Prime Minister Andy Burnham unveiled the Your First Home scheme on Saturday, offering first-time buyers a 20 per cent equity loan with a 2.5 per cent deposit for new-build properties, including an initial interest-free period. Vistry led gains, rising 16 per cent in early London trading, while Taylor Wimpey, Persimmon and Crest Nicholson each climbed 15 per cent and Barratt Redrow gained 14 per cent.

The sector has been squeezed by elevated interest rates, persistent inflation and weak consumer confidence, with profits at the largest housebuilders projected to fall 12 per cent this year. The original Help to Buy programme, which ran from 2013 to 2023, helped hundreds of thousands of first-time buyers but was criticised for inflating house prices. A Ministry of Housing review found it was "very high value for money" and pushed prices up by only 2 percentage points.

Full details of the new scheme will be revealed at the Budget on October 28, with developers expected to contribute via a fee tied to property values. Wider construction stocks also rose, with Travis Perkins up 10.9 per cent and Ibstock up 22.6 per cent.