FTSE advances, housebuilders rally ahead of spending review

* Blue (OTC BB: BUES - news) -chip FTSE 100 up 1 pct

* Housebuilders up on expected spending hike

* Travel stocks recover, Thomas Cook (Xetra: A0MR3W - news) soars

* Anglo American (LSE: AAL.L - news) falls, miners lower

By Kit Rees

LONDON, Nov 25 (Reuters) - Britain's top share index advanced on Wednesday, as investors warmed to housebuilders ahead of Finance Minister George Osborne's planned increase in spending on the housing sector.

Osborne is set to announce an increase in spending on housing to support the construction of around 400,000 new homes as part of his autumn spending review, due to be presented at 1230 GMT.

The Thomson Reuters UK homebuilding index rallied 5.8 percent, while Taylor Wimpey (LSE: TW.L - news) , Persimmon , Barratt Developments (LSE: BDEV.L - news) and Berkeley Group were all trading up between 4.9 percent to 6.6 percent.

Mid-cap Zoopla was up 1 percent, while estate agency Foxtons Group (LSE: FOXT.L - news) advanced 2 percent.

"The housebuilders have done pretty well recently anyway, so they've got a bit of wind in their sails," said Laith Khalaf, senior analyst at Hargreaves Lansdown (LSE: HL.L - news) , noting the importance of the sector to the British economy.

"As long as interest rates remain low, it's hard to see what's going to stop that," he added.

The UK blue-chip FTSE 100 index was up 1 percent at 6,336.79 points by 1138 GMT.

The travel and leisure sector, despite growing tensions in the Middle East and the downing of a Russian warplane near the Syrian border, was pushed higher by a rally in mid-cap Thomas Cook's shares. The FTSE 350 travel and leisure index advanced 1.7 percent.

The British holiday company soared 9 percent after reporting results in line with expectations and saying it was confident in its outlook for 2016, despite cancelling holidays in Egypt after the UK suspended flights to a major resort. The possible resumption of dividend payouts in 2017 also helped lift the stock.

However, some analysts were less positive on the outlook for the stock, citing concerns over the perceived security of certain destinations.

"We also expect the UK to face a later booking profile as there are simply too many destinations with perceived threats at this time," analysts at HSBC wrote.

Leading the day's decliners, miner Anglo American fell 7 percent after HSBC analysts downgraded their rating on the stock to "reduce" from "hold", saying cost and dividend cutting might not stop the cash burn at the company.

In the same sector, shares in BHP Billiton (NYSE: BBL - news) and Glencore (Xetra: A1JAGV - news) were down more than 1 percent. (Additional reporting by Atul Prakash; Editing by Keith Weir and David Holmes)