On Wednesday afternoon, the largest housebuilders of the United Kingdom saw the value of their shares rise. It comes as the prospect of a no-deal Brexit started to fade.
Property heavyweights including Persimmon, Redrow, and Berkeley Group were among the top 10 FTSE risers on Wednesday as a frantic 24 hours of political tussling in Westminster sparked the possibility of a “softer” Brexit or a second referendum.
Blue-chip constituents such as Persimmon and Berkeley Group have increased by six and seven and percent respectively, while Redrow, an FTSE 250 company, also rose by seven percent.
Ibstock, a brick-maker, has also observed its share price rise by seven percent.
Housebuilders have taken some kickings on the London Stock Exchange in the past months. Several major firms blamed lower profits and less activity in the property market on the current political volatility.
However, the developments that were observed last Tuesday night signalled a creeping return in the confidence of the City, with Prime Minister Theresa May’s three defeats in Parliament provoking new speculations regarding the possibility of another referendum and, for some people, lessening the possibility of the United Kingdom leaving the bloc without a deal.
A dramatic and successful amendment that was released by Dominic Grieve last night means that the MPs will be able to vote on what it wants the UK government to do if the Prime Minister is not able to win a majority for her own deal, with the likelihood of the parliament deciding to take a no deal outcome off the table.
The actions of the Parliament, alongside a ruling that was determined from the European Court of Justice (ECJ) last Tuesday, have reinforced the belief that a no-deal Brexit is now fading. The ruling said that the United Kingdom has the power to revoke Article 50 unilaterally.
A financial analyst at Spreadex, Connor Campbell, stated: “The pound decided to make the most of yesterday’s Commons humiliation of Theresa May….This is seemingly because the success of Dominic Grieve’s amendment on Tuesday means that the chance of a no-deal Brexit have been reduced.”
He continued: “If – or more likely when – Theresa May’s plan gets voted down, the government then has 21 days to make a statement setting out how it proposes to proceed. MPs would then get a say on this Plan B, something that appeared to mean more to the pound than the fact the defeat dealt another potentially government-crushing blow to the PM.”
Michael Hewson, the chief market analyst of CMC Markets, said that the possibility of a no deal “is further away than ever,” thus leaving either a soft Brexit or even remaining in the European Union.
Data from Bloomberg that summarises bookmaker odds places the chances of a second referendum on Brexit at a new high of approximately 44 percent.