The share prices of UK housebuilders jumped on Friday after Labour’s landslide victory in the general election saw the party return to power for the first time since 2010.

Vistry, Persimmon, Taylor Wimpey, Barratt and Berkeley all finished the day between 2-3% higher on the back of Labour’s plans to build new homes.

During the election campaign, Labour focused largely on tackling housing supply, with a promise to build 1.5 million homes over the next parliament.

The party has pledged to reform the planning system, although some have warned that doing so will not be easy.

In an interview with the BBC, new Chancellor Rachel Reeves said that planning reform was “front and centre” of Labour’s plan to grow the economy.

In order to build the 1.5 million homes and the energy infrastructure that Labour has committed to, “we need to change how our planning system works – speed it up, stop the bureaucracies that are tying up investments in red tape,” she said.

Labour has also said it will allow development on lower-quality areas in the green belt, dubbed the “grey belt”.

Analysts RBC Capital Markets said in a note that they would be watching to see if the new government’s “walk matches its talk”.

“In the very short term we suspect that the talk alone will be enough to lift share prices,” RBC said.

However, Sarah Coles, head of personal finance at Hargreaves Lansdown, said overhauling the planning system is likely to be a “gradual and tortuous process”.

The share price rise comes as the UK’s biggest mortgage lender Halifax said mortgage costs are still the biggest challenge facing homebuyers and those coming to the end of fixed-term deals

However, the squeeze caused by higher interest rates is likely to ease gradually as incomes rise and house price growth remains subdued, said Amanda Bryden, the head of mortgages at Halifax.

According to the lender’s latest figures, the average UK house price was relatively flat in June, falling by 0.2% from the previous month.

The average house price in the UK stood at £288,455 last month, the Halifax said, edging down from £288,931 in May.

Prices were up 1.6% from a year earlier, echoing recent figures from the Nationwide building society.

Ms Bryden said, however, the market was “delicately balanced” and sensitive to how quickly any changes may be made to the Bank of England’s base rate.

The UK’s central bank began to raise its key interest rate in late 2021 in an attempt to tackle soaring inflation. Prices rose as pandemic-related restrictions eased, causing supply chain crunches, and food and energy prices spiked following Russia’s invasion of Ukraine.

The Bank’s base rate currently stands at 5.25%, the highest level in 16 years.

However, at its last rate-setting meeting, the Bank appeared to hint that it could cut rates at its next meeting on 1 August.

Despite this, many homeowners coming to the end of a fixed-rate deal are now facing mortgage rates much higher than they have become used to.

Last week, the Bank said that about three million households are set to see their mortgage payments rise in the next two years.

The current average rate for a two-year fixed deal is 5.93%, although this is lower than last year’s peak of 6.86% and major lenders have been cutting rates in recent days.

In its latest figures, Halifax said that Northern Ireland saw the fastest regional house price growth, up 4% from a year earlier.

London still has the most expensive property prices, now averaging £536,306.

Prof Sir John Curtice told the BBC that the general election results highlighted how the Conservatives performed poorly in places where more than one-third of families have a mortgage.

He suggested this could be due to the turmoil seen on markets following the mini-budget of September 2022.