Budget speech boosts housebuilders

Updated: 

Shares in Britain's leading housebuilders jumped by as much as 7% after Chancellor George Osborne delivered a Budget-day boost to the sector.

Under the proposed £3.5 billion Help-to-Buy scheme, the Government will provide an interest-free loan worth 20% of the value of a new-build house to help those with a 5% deposit get on the housing ladder.

It was another lift for a sector which has enjoyed improved fortunes in recent months, although the Budget overall failed to cheer the London market as the FTSE 100 Index slipped 18.7 points to 6422.5.

The decline, which follows a three-day losing streak amid uncertainty over the bailout of debt-laden Cyprus, was compounded by more bad news on the UK economy after figures showed the first increase in unemployment in a year.

And in a further sign of the squeeze on household budgets, average weekly earnings rose by 1.2% in the three months to January, down from 1.3% between October and December last year and less than half the rate of inflation.

Miners were again shaken by the uncertain global outlook, with Anglo American down by 53p to 1767p and BHP Billiton off 26.5p to 1955p.

And Marks & Spencer shares lost some of their recent takeover strength after analysts at Nomura estimated that clothing sales declined by a double-digit percentage figure in the four weeks to February 17. The performance has been impacted by the timing of half-term and the weather but shares still fell 5.75p to 392.35p.

Royal Bank of Scotland rose 2%, or 4.6p to 298.15p, as Liberum Capital backed chief executive Stephen Hester's turnaround efforts by recommending that investors now buy shares in the part-nationalised bank.

It expects that RBS will have sold off all its non-core assets by next year and that an upcoming announcement from the Financial Policy Committee on capital strength is likely to clear some of the uncertainty surrounding the banking sector. Barclays fared less well after a fall of 4.1p to 293.6p and Lloyds Banking Group remained flat at 49.4p.

Among the housebuilders, Barratt Developments rose 17.5p to 257.35p, Taylor Wimpey lifted 5.35p to 90.95p and Persimmon improved 53.5p to 1025p.

Budget 2013: Winners and Losers

Budget 2013: Winners and Losers

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