Housebuilders rally ahead of Autumn Statement

Taylor Wimpey, Barratt Developments, Persimmon, Berkeley Group, Bellway and Bovis Homes were all trading sharply higher.

"Shares in housebuilders have burst out of the starting blocks in early trading this morning, following the news that George Osborne is set to unveil a huge housebuilding programme. These companies stand to be prime beneficiaries of the government’s plans to address the housing crisis,” said Laith Khalaf, senior analyst at Hargreaves Lansdown.

“Affordable housing is a big issue in the UK today and the government looks to be responding by turning on the supply taps. First time buyers are likely to benefit from the plans, but so are the developers who are going to going to build the hundreds of thousands of starter homes ordered by George Osborne.”

The Chancellor is expected to announce the construction of around 400,000 new homes and a range of policies designed to help people buy their own homes.

“Homebuilders are benefitting from the suggestion that the Chancellor will announce a major effort to build affordable houses, but this may not leave much scope for him to help UK plc further,” said Rebecca O’Keeffe, head of investment at stockbroker Interactive Investor.

“The government has been very supportive of SMEs over the past few years and this is evidenced by the outperformance of this segment of the market compared to their large cap counterparts. The risk is that in having to find significant cuts, some of these supportive policies may be squeezed and this may result in small cap stock valuations starting to come under pressure.”

Estate agencies were also higher ahead of the statement, with Rightmove, Zoopla and Foxtons all in the black.