House price growth falls to four-month low
Posted by The Oracle Group on 3rd July 2019 -
INDUSTRY
House price growth falls to four-month low
UK house price growth slowed to 0.5% year-on-year in June, according to Nationwide’s latest house price index, lower than May’s 0.6% growth and the worst since February’s 0.4% increase. The average price of a UK home rose from £214,946 to £216,515 between May and June, while prices in the capital fell 0.7% to an average of £465,722 and prices in the south east dropped 1.6% to £277,227. Marc von Grundherr, director of Benham and Reeves, acknowledged that the property market in London and the south east may take longer to recover from the uncertainty, while Jonathan Hopper, managing director of Garrington Property Finders, compared London’s housing market to a supernova: “After years of burning with stellar brightness, its slowdown is now exerting a gravitational force on the national average,” he said.
IMLA welcomes leasehold reforms
The government’s plans to axe the sale of new build properties on a leasehold basis have been welcomed by the Intermediary Mortgage Lenders Association (IMLA). The changes include immediate action to prevent Help to Buy being used to purchase leasehold properties. “These proposals from the government, including immediate action to remove leasehold properties from Help to Buy, will protect consumers from some of the unjust practices we have seen in recent years regarding leasehold properties,” said Kate Davies, executive director of IMLA.
MORTGAGES
Two-year fixed rates have increased since PRA warning
The average rate for a two-year fixed mortgage has started to increase, data from Moneyfacts.co.uk has shown, following the Prudential Regulation Authority’s warning that the Bank of England is watching mortgage rates “like a hawk”. Since PRA chief executive Sam Woods made the warning at the end of May, the average rate for 2-year fixed products has increased from 2.47% in May to 2.50% in July, which Moneyfacts suggested shows lenders have taken note. “It is clear the warning by the PRA in May seems to have fulfilled the central bank’s possible intention to slow down mortgage rate cuts,” said Darren Cook, finance expert at Moneyfacts.co.uk.
Green households could get better mortgage rates
The Department for Business, Energy and Industrial Strategy (Beis) has launched a £5m fund to increase the number of “green mortgages” - which reward homeowners with lower mortgage rates when they make their property more environmentally friendly. The department also indicated that a separate £10m fund would be launched to help find viable ways of retrofitting older properties with environmentally-friendly technology.
CONSTRUCTION
UK construction output falls to decade low
IHS Markit’s UK Construction Purchasing Managers’ Index (PMI) fell to its lowest level since April 2009 in June, to a reading of 43, on the back of the sharpest drop in UK housebuilding demand for three years. This marks the fourth time the sector has contracted in the past five months. Economists were expecting a figure of 49.2. Any reading above 50 denotes growth, below represents contraction. Tim Moore, associate director at IHS Markit, said the figures revealed "weakness across the board" for the construction sector.Financial Times, Page: 3 City AM Evening Standard The Daily Telegraph The Scotsman, Page: 33 I, Page: 38 The Sun, Page: 43 The Guardian, Page: 37 The Independent, Page: 54 The Times, Page: 40 Daily Mirror, Page: 38
Builders urged to adopt modern measures
Britain’s builders must adopt modern building methods if the target of building 300,000 new homes a year by 2020 is to be reached, MPs have warned. In a report, the Commons housing, communities and local government committee has urged the government to invest in methods of construction that would allow homes to be built more quickly and cheaply – including the use of new materials and precision manufacturing to allow a greater proportion of homes to be built off-site.
COMMERCIAL
St Modwen predicts warehouse boom will continue
St Modwen has reported an 8% rise in pre-tax profits to £28m and a 1.3% rise in net asset value per share, a key property industry metric, to 476p for the six months to May. The company’s chief executive Mark Allan says he predicts that Britain’s warehousing boom would persist, with British retailers continuing to seek additional logistics space as the shift away from high streets to online shopping continued. He added: “I wouldn’t be surprised if there was 25-30% too much physical retail space across the UK today. That has to be repurposed, and I think retailers need something like three times as much space to support logistics for a multi-channel [in-store and online] type business than if they’re just operating out of a traditional store format.”
FIRMS
Purplebricks to retreat from US
Purplebricks is planning to step back from the US market, it has been reported, amid growing losses. Sky News reported that the company would announce its withdrawal from the US alongside its annual results today - figures that are expected to reveal substantially higher losses.
Stewart Milne investing £120m in more homes
Stewart Milne Homes is investing £120m in the Tayside region to build more than 350 homes at locations in Arbroath, Ballumbie and Blairgowrie.
HOUSING
‘Wholesale demolition’ of Milton Keynes estates shelved
Plans to demolish six housing estates as part of a £1bn regeneration plan expected to take more than 15 years have been shelved by Milton Keynes Council. The administration said the “wholesale demolition” of the estates “will not happen,” and cabinet member Cllr Nigel Long said residents would be consulted on a “new way forward” involving more gradual change, and improvements and small-scale rebuilding and remodelling of existing housing stock.
INFRASTRUCTURE
Liverpool could sacrifice World Heritage status
Liverpool’s mayor has said that infrastructure and developments including Everton FC's new stadium plans were "more important" than keeping the city’s Unesco World Heritage status. Unesco has warned the city council it risked losing its status next year over concerns of overdevelopment. Liverpool mayor Joe Anderson said he would be prepared to lose the World Heritage tag to "secure a future for our city... with secured jobs".
RETAIL
New bidder for Majestic Wine emerges
Majestic Wine is in advanced talks to sell its 200 stores to Fortress, owned by Japan’s tech giant SoftBank, in a deal worth £100m. It also emerged that the former chief executive of Berry Bros & Rudd Dan Jago has been courted by Fortress, with a view to appointing him as chief executive if the sale goes through. Other potential buyers remain in contention, including Waterstone’s-owner Elliott and private equity firm OpCapita.
ECONOMY
UK ‘likely’ to enter recession in no-deal Brexit, Moody’s warns
Moody’s now believes the UK “would likely enter a recession” if it crashes out of the EU in a hardening of its view of the economic impact of a no-deal Brexit.
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