UK housebuilders rally on Boris Johnson's 5% mortgage scheme announcement
UK housebuilders are rallying after UK Prime Minister Boris Johnson announces a 5% deposit mortgage scheme for first time buyers at the Conservative Party conference
Stocks in the UK house-builder sector are in rally mode in today’s session with Crest Nicholson outperforming to trade higher by more than 5.5%. Taylor Wimpey, Barratt Developments and Redrow PLC have also caught a bid, gaining more than 2.5% each so far in the session.
UK Prime Minister Boris Johnson announced a new 5% mortgage deposit scheme for first-time buyers in his speech at the Conservative Party conference, suggesting this policy ‘could create two million more owner-occupiers - the biggest expansion of home ownership since the 1980s’. He said: ‘We need now to take forward one of the key proposals of our manifesto of 2019: giving young, first-time buyers the chance to take out a long-term, fixed-rate mortgage of up to 95% of the value of the home - vastly reducing the size of the deposit and giving the chance of home ownership - and all the joy and pride that goes with it - to millions that feel excluded.’ He said it was a ‘disgrace’ that millions of people are being forced to ‘pay through the nose to rent a home which they can’t truly love or make their own,’ adding ‘we will help turn generation rent into generation buy.’
Crest Nicholson: technical analysis
Taking a look at the chart of Crest Nicholson, the stock is down by almost 50% year-to-date. The stock tried to rally off the April lows but stumbled into resistance at the 38.2% Fibonacci retracement level. The stock then traded in an descending trendline before bouncing off support at the 0% Fibonacci retracement level and has since been in rally mode, pushing above the psychological 200p level, putting it on track to test the next key resistance level at the 23.6% Fib level at 245p. A break above could strengthen the short-term bull case. The recent rally has been supported by momentum with the RSI indicator pointing higher, having bottomed just above the key 30 level.
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