UK equities moved higher on Monday as a government housing initiative lifted housebuilder shares, while developments in the Middle East continued to influence energy prices and broader market sentiment.
The FTSE 100 was up around 0.47% in early trading, with the FTSE 250 also moving higher. Sterling gained 0.15% against the US dollar to $1.3266, although the wider market remained sensitive to movements in oil prices and expectations for interest rates.
Housebuilders were the main focus following confirmation that the UK government plans to introduce a new equity loan scheme for first-time buyers. The “Your First Home” programme is expected to be confirmed in next month’s Budget and will operate in England.
The scheme is designed to support buyers of new-build properties with deposits as low as 2.5%, alongside government equity loans worth up to 20% of the property value. The loans will include an initial interest-free period, with the government saying the arrangement could reduce monthly costs compared with a 95% mortgage.
Further details, including household income and local property price limits, are expected to be announced at the Budget. The initiative provides a potential source of additional demand for new-build housing, although the government has also acknowledged that the sector is facing pressure from international economic conditions and higher construction costs.
Housebuilder shares responded strongly to the announcement, with Persimmon, Barratt Redrow, Taylor Wimpey and Vistry among the companies attracting increased market attention. Bellway and Berkeley also moved higher.
The reaction places renewed focus on the potential impact of government-backed support on housing demand and the sales environment for developers. The effectiveness of the programme will depend on its final terms, eligibility criteria and the level of take-up once it becomes available.
Elsewhere, commodity markets continued to influence UK equities. Brent crude rose above $100 a barrel, while West Texas Intermediate also moved higher as uncertainty surrounding the situation involving the US and Iran remained a key factor for energy markets.
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