Shares keep climbing on hopes of ‘Boris bounce’

Shares in housebuilding firms have continued to move in the right direction this morning as the boost many received following Friday’s decisive Conservative victory continues.

Shares in both Berkeley Group and Redrow rose nearly 3% in early trading, with investors buoyed by hopes of an economic boost under the new government and the prospect of policies that prioritise home ownership.

Forecasters at firms including Rightmove and EY have predicted that prices are now likely to rise 2% in 2020, in part boosted by the limited certainty over Brexit provided by the election. This may allow the release of some pent-up housing market demand.

Shares rose by as much as 15% across the housebuilding sector on Friday following Boris Johnson’s victory. Shares in Berkeley group are now trading 17% above their closing price on Thursday, with Barratt and Taylor Wimpey 15% up, Bellway 13% up and Bovis Homes up by 10%.

Shares in Persimmon spiked immediately after the markets opened on Friday with a rise of 16%, but have since fallen back.

The movement comes as online estate agent Rightmove today predicted that prices will rise 2% next year, with the Conservative majority giving home buyers and sellers a “window of certainty”.

Director Miles Shipside said the biggest increases, of up to 4%, would be seen in the North, with rises in London and the South-east restricted to around 1%.

Howard Archer, chief UK economist at accounting giant EY, told the Mail on Sunday that the Conservative win last week would boost house-price growth from its current level of about 1% to about 2% a year.

Over the weekend, the prime minister promised to “spread wealth across Britain”. He is expected to lay out his legislative programme in a Queen’s Speech on Thursday. This may include laws to end “no-fault” evictions by housing landlords, as well as plans for a big programme of infrastructure delivery.

The Conservative manifesto promised that the government would boost home ownership, devise new measures to support first-time buyers after Help to Buy is withdrawn in 2023, and oversee construction of one million homes over the next five years.