Taylor Wimpey led a resurgent housebuilding sector, as traders grew nervous that their bearish positions looked vulnerable.

Covering of short positions, together with a report from the Centre for Economic and Business Research noting that a halt in house building amid the credit crunch could fuel a 30% rise in house prices between late 2009 and 2010, pushed its shares up 5.25p to 45.75p. Bellway, another builder hit hard in recent weeks, followed suit, up 33.25p to 507p, Persimmon rose 17p to 311.5p and Berkeley was up 36.5p to 778.5p.

The Times