London Markets

Shares of leading U.K. home builders surged on Monday, on reports the U.K. government will again try to boost homeownership from those struggling to get on the housing ladder.

Leading builders including Persimmon PSN, +5.21%, Barratt Developments BDEV, +5.09%, Taylor Wimpey TW, +4.98%, Bellway BWY, +6.23%, Crest Nicholson CRST, +5.98% and Vistry VTY, +4.39% each rose between 5% and 7%.

U.K. media reported that Chancellor of the Exchequer Rishi Sunak is set to announce a new mortgage guarantee that will allow buyers with as little as a 5% deposit buying homes up to £600,000. Sunak will deliver the new budget on Wednesday.

In London, the average home price is nearly £500,000, requiring a £75,000 deposit on a typical mortgage. The average salary in London is less than £40,000.

Analysts at Jefferies said the new program sounds similar to the Help to Buy mortgage assistance program that ran from 2013 to 2017, and saw just over 100,000 guarantees over four years — never more than 4% of total transactions.

The broader FTSE 100 UKX, +1.17% rose 1.6%, joining the global rally on Monday after a difficult week in which investors focused on rising bond yields.

The yield on the 10 year gilt TMBMKGB-10Y, 0.783%, which touched as high as 0.83% last week, was 0.79%. The U.S. 10-year TMUBMUSD10Y, 1.433% yielded 1.44%.

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Steve Goldstein

Steven Goldstein is based in London and responsible for MarketWatch's coverage of financial markets in Europe, with a particular focus on global macro and commodities. Previously, he was Washington bureau chief, directing MarketWatch's economic, political and regulatory coverage. Follow Steve on Twitter: @MKTWgoldstein.