Shares in housebuilding firms Persimmon, Vistry and Barratt have surged this morning as analysts label the Labour landslide victory a “positive” for the market.
Following the Labour victory, Persimmon shares soared 45 per cent to 1,477p, Vistry up 35 per cent to 1,304p, and Barratt 11 per cent to 502p.
It comes as analysts remain “optimistic” for the housebuilding market, with Labour leader and soon-to-be Prime Minister Keir Starmer having previously said he would work with local authorities to give first-time buyers first dibs on homes and limit developments being sold off to international investors.
In the Labour party’s 125-page manifesto, Labour also proposed to reform planning rules to build 1.5m more homes.
“The country urgently needs more new homes, of all types and tenures,” David Thomas, chief executive of Barratt Developments, said.
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“We look forward to working with the new government to help them build 1.5m homes across the next parliament, unlocking planning and helping first-time buyers access affordable finance, ultimately helping more families own a high quality, sustainable, new home,” Thomas added.
Tim Bannister, Rightmove’s property expert, said the “certainty” of the next government will be a good sign for the housebuilding and property market, while many wait to see which policies are prioritised.
He added: “We can see in our data that in previous election years, there has been a slight bounce in home-mover activity after an election has taken place – so the same could happen this year in the short term, particularly against a background of a potential Bank Rate cut on the horizon, and lowering mortgage rates.”
The cautious optimism is shared by Nick Leeming, chairman of property firm Jackson-Stops, who said “such an ambitious target will take significant time, resource and support to achieve”.
Leeming added: “The property industry will be looking for further clarity but also the opportunity to engage with the government to bring Labour’s policies to fruition in a sustainable and effective way.
“For buyers and sellers in the short term the market is likely to remain on the same trajectory as the first half of 2024, the knowledge that a change of government was coming has avoided a cliff edge or need for immediate changes to be made.”