The FTSE 100 edged higher on Monday as a surge in UK housebuilders and gains in oil majors helped London withstand another rise in crude prices and global bond yields.
The blue-chip index opened about 0.26% higher, with Barratt Redrow jumping nearly 15% and Persimmon rising about 16%.
Shell and BP added around 1% as Brent crude moved back above $106 a barrel. The advance followed a 0.14% rise for the FTSE 100 on Friday, when it closed at 10,695.25.
Housebuilders put domestic policy back in charge
The strongest move came from housebuilders after the UK government confirmed plans for a new equity-loan programme, Your First Home, to be detailed in the October Budget.
The scheme is expected to allow eligible first-time buyers to purchase new-build homes with deposits of 2.5%, backed by government equity loans of 20%.
The policy is designed to tackle affordability while also supporting demand for new housing.
That matters for a sector that has spent much of 2026 dealing with weak demand, high mortgage costs and a slower construction market. Barratt Redrow, Taylor Wimpey, Persimmon and Vistry all surged after the announcement.
Morningstar analyst Jack Fletcher-Price said earlier this month that Barratt Redrow already appeared attractively valued relative to listed UK peers after its latest results, despite the difficult housing backdrop.
Oil helps the FTSE but raises another risk
The FTSE 100’s large energy weighting provided another source of support, but the same oil rally threatens the broader market.
Brent rose above $106 after US President Donald Trump rejected an Iranian proposal linked to reopening the Strait of Hormuz, although further talks were expected. Higher crude prices lifted Shell and BP, helping support the FTSE.
Yet expensive energy is also feeding inflation expectations and keeping pressure on bond markets. That is a problem for retailers, property companies and other rate-sensitive stocks.
AJ Bell investment director Russ Mould told Sharecast last week that the earlier decline in oil had brought welcome relief because elevated energy costs were intensifying inflation concerns.
Europe rises but bond yields cap the mood
The broader European market also edged higher, with the STOXX 600 up about 0.3% in early trading.
Most major regional markets were positive, but gains remained modest as investors assessed higher oil prices and restrictive monetary policy.
Mining shares were among London’s weakest performers as a stronger dollar pressured metals.
Fresnillo, Endeavour Mining, Antofagasta, Anglo American, Glencore and Rio Tinto fell between roughly 2% and 5.5% in early trade.
Investors were also watching Bank of England Deputy Governor Dave Ramsden’s remarks on quantitative tightening.
The Bank has estimated that QT has added about 20 to 30 basis points to gilt yields, although Ramsden has characterised that contribution as small compared with the broader rise in term premia.