The climb was prompted by expectation that Chancellor George Osborne will announcement new breaks and incentives to boost house building in Britain as the government attempts to address the shortage.
Persimmon was 5.6% up by mid-morning, Barrett Developments was up 4.1%, Taylor Wimpey up 4.9% and Berkeley Group rose 4.05%.
The FTSE 100 was 54 points up to 6330 while the FTSE 250 gained 156 points to reach 17105.
“Shares in house builders have burst out of the starting blocks in early trading this morning, following the news that George Osborne is set to unveil a huge house building programme,” Laith Khalaf, senior analyst at Hargreaves Lansdown.
“These companies stand to be prime beneficiaries of the government’s plans to address the housing crisis,” Khalaf continued. Affordable housing is a big issue in the UK today and the government looks to be responding by turning on the supply taps. First time buyers are likely to benefit from the plans, but so are the developers who are going to going to build the hundreds of thousands of starter homes ordered by George Osborne. Just yesterday Bank of England policymakers hinted they are considering doing their bit for first time buyers by making buy to let mortgages more expensive,” he added.
Elsewhere Rolls Royce made further gains, rising this 3.7% morning, as the market digested the news that it is launching a major restructuring of the business to enhance its prospects.