U.K. Homebuilders Rise on Government Underwriting Plan

U.K. homebuilders gained after the Financial Times reported that the British government is planning to stimulate construction by underwriting bonds issued by non- profit developers.

The plan will lower financing costs for non-profit developers, known as housing associations, by guaranteeing debts, the FT reported today, without saying where it got the information.

Under the plan, housing associations and private developers would agree to work together on larger housing projects, the FT said. The proposal would also loosen regulations for publicly traded homebuilders to include social housing in their developments, according to the report.

The Bloomberg EMEA Homebuilders Index rose 1.2 percent. Persimmon Plc (PSN), the U.K.’s largest homebuilder by market value, was up 12 pence, or 1.8 percent, at 668 pence at the 4:30 p.m. in London, the highest in almost five months. Bovis Homes Group Plc (BVS) rose 1.7 percent.

To contact the reporter on this story: Chris Spillane in London at cspillane3@bloomberg.net.

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net.