The FTSE and pound both jumped today on news that there was progress made in the latest Brexit talks.
The FTSE 100 was up by 72 points or 1.1% to 6586 points, whilst the FTSE 250 index jumped 1.4%.
The blue-chip index was pushed up by house builders, which were the top risers on Wednesday, led by Barratt Development (+3.6%) and Persimmon (+3.2%).
“Optimism around Brexit talks have been accompanied by an impressive three-year high in house prices to bring significant gains for the homebuilders,” said Joshua Mahony, Senior Market Analyst at IG.
“UK housebuilders are leading the push higher for UK stocks today, with the latest government statistics highlighting the fastest rate of house price growth since 2017. Nevertheless, while today’s data covers the month of October, the leading RightMove HPI release for December did highlight a 0.6% decline in prices as Brexit and stamp duty holiday worries kick in.
“Nevertheless, the housebuilders remain on a knife edge as things stand, with Q1 performance likely to be driven by the outcome of Brexit talks and subsequent economic fallout.
“While the stamp duty holiday may have brought plenty of buyers to the table, the mental block that Brexit has provided to many means a deal could unlock a whole new source of demand in 2021,” added Mahony.
The stamp duty holiday will come to an end in March and house prices are expected to dip ahead of the deadline.
Since Rishi Sunak introduced the stamp duty holiday over summer, the housing market has seen a boom. As sellers rush ahead of the stamp duty deadline, the property website found a 0.5% fall from October’s average asking price of £323,000.
Rightmove has said that sellers should be more realistic when pricing their houses to ensure they are sold before the end of the deadline.