More from the UK
ECONOMISTS GENERALLY BACK MPC'S DECISION
By Melanie Tringham
ftadviser.com
The rise in interest rates will create a solid basis for investors looking at the UK economy, according to economists.
The 25 basis point rise to 4 per cent meant that any danger that the economy could overheat will have eased for the time being. …
As far as property is concerned, there is unlikely to be a deleterious effect on the sector, according to Isis Asset Management. Michael Barrie, manager of the Isis property trust, said that commercial property yields were unlikely to be affected. …
Research conducted by Isis and CB Richard Ellis, looking at the relationship between property yields and gilt yields, found that there was no correlation between the 10-year gilt yield and property yields. …
GE LIFE PLANS FTSE AND HOUSE INDEX FUND
ftadviser.com
GE Life has launched an investment product that tracks the FTSE100 and the Halifax house price index.
The Capital Secure Investment Plan has been designed to provide 100 per cent of any increase in the average level of the FTSE100 and the Halifax HPI. The six-year plan also offers a secured return of the initial contribution, as long as the plan is held to maturity. …
THE INDEPENDENT
HOUSE PRICES: MORE DAUNTING NEWS FOR FIRST TIMERS
news.independent.co.uk
The price of the average house in England and Wales is now £163,584, according to the Land Registry, meaning the average buyer needs to be earning at least £42,000 as a first time buyer.
To put this into context, a buyer with a 10% deposit of £17,000 would need a mortgage of just under £147,000 and an income of £42,000 a year, to be able to afford the average property. …
LETTERS
argument.independent.co.uk
HEADING FOR A BUMPY LANDING: TRIBULATIONS OF THE HOUSE MARKET
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All of the people buying to let or buying second homes, as well as many of those buying to occupy, factor into their calculations the expectation that prices will continue to rise far ahead of either interest rates or general inflation. In this situation current prices depend on the expectation that they will continue to rise and it is next to impossible to engineer a soft landing. As soon as the rate of price increase falls to something like the level of interest rates, the motivation underpinning a significant part of the market disappears. It then only takes a small number of people to stop buying and/or start selling to engender a general price collapse.
Low interest rates cannot stop this happening though they may well allow owners who fall into negative equity to keep up their payments and so avoid repossession.
MICHAEL NOAR
Hollingbourne, Kent
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After a period of post-doc research at Harvard Medical School, my talented PhD son has found a good job in London, where his key worker's housing grant will help him to buy a small flat. The problem is getting a mortgage.
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It seems that to obtain a large loan you have to acquire some little ones first, making sure that you pay the money back. Must my son buy a washing machine before he can buy a flat with a kitchen to put it in?
COLIN COOPER
St Leonards on Sea, East Sussex
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MANUFACTURING FALLS AGAIN IN DECEMBER
By Susie Mesure
news.independent.co.uk
Manufacturers suffered their first back-to-back fall in output for more than a year in December, sowing doubts over the prospect of further interest rate rises from the Bank of England's Monetary Policy Committee (MPC).
Official figures yesterday showed the sector contracted by 0.1 per cent on the month, confounding City forecasts of healthy expansion to make up for November's shock fall. …
BANKS EXPECT A SEASON OF BUMPER RETURNS
'Excess' profits will put them on collision course with consumer groups and politicians
By Katherine Griffiths, Banking Correspondent
news.independent.co.uk
… if analysts' forecasts are to be believed, almost the entire banking sector is gearing up for a reporting season in which bumper profits are likely to be the top line of almost every results presentation. …
Shareholders should enjoy the situation while they can. While analysts forecast a month-and-a-half-long season of record profits for British banks, also plotted on their graphs are falling lines to denote the trajectory of profits margins, not just this year but for the next few years.
This is partly because consumer spending is expected to slow, and will therefore become a smaller slice of the pie with less profitable corporate banking making up more of the revenue growth.
OUTLOOK: EVEN THE FRENCH WILL SAY 'NON' TO EUROTUNNEL
Symbian/Nokia; G7 gobbledygook
By Jeremy Warner
news.independent.co.uk
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As Eurotunnel chief executive Richard Shirrefs observed yesterday, the tunnel would never have been built had financiers realised how few would use it, or how much more than budget it would cost. But there it is, a marvel to behold, and thankfully it is the financiers who must bear the cost of their miscalculation, not the tax payer.
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G7 GOBBLEDEGOOK
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Right now, a weak dollar suits American policy makers just fine. Besides, there is really very little finance ministers can do about a currency realignment in full flood. Massive intervention by the Bank of Japan may have helped slow the appreciation of the yen against the dollar, but it hasn't succeeded in reversing it or even halting it. Unless the European Central Bank suffers a Damoclesian conversion, there is no possibility of intervention on that scale being applied to the euro/dollar exchange rate. The dollar has yet to hit bottom.
DOLLAR TUMBLES AS MARKETS TEST RESOLVE OF G7 FINANCE MINISTERS
By Philip Thornton, Economics Correspondent
news.independent.co.uk
The dollar tumbled against the euro and the pound yesterday as the markets tested whether the Group of Seven's finance ministers were prepared to back up their condemnation of currency volatility with firm action. …
REUTERS TO OUTSOURCE WALL ST NEWS TO INDIA
By Saeed Shah
news.independent.co.uk
Reuters, the financial information group, is to take the trend of outsourcing jobs to India one stage further.
The company, which is implementing a massive cost-cutting programme, is to trial the reporting of Western business news from a base in Bangalore. …
THE TIMES
HOUSE PRICE RISES SLOWING
By Anne Spackman, Property Editor
timesonline.co.uk
THE property market is cooling down, according to two sets of figures released this week.
The Government's official index published yesterday shows house price inflation falling to 8.3 per cent across the country. The Land Registry reported a day earlier that prices rose by just 1.6 per cent in the three months to December, compared to nearly 8 per cent the previous quarter. Both reports are in sharp contrast to figures issued by the Halifax last week, which showed house prices rising at an annual rate of 16 per cent. …
BOY BLAMES DAD FOR £12,000 CREDIT SPREE
By Sam Coates
timesonline.co.uk
A TEENAGER who stole his father's credit card, flew to Rome and spent £12,000 on designer goods and smart hotels has blamed his parents for not taking him to the January sales.
Tom Smith, 17, took his father's NatWest Mastercard and Switch and went on a four-day spree because he was fed up with the weather and wanted a Prada coat. …
BATTLE OF NERVES AS G7'S DOLLAR RESOLVE IS TESTED
By Gary Duncan, Economics Correspondent
timesonline.co.uk
EUROZONE finance ministers were locked in a battle of nerves with markets last night after foreign exchanges moved quickly to test the Group of Seven economies over their warning against excessive currency swings.
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JOB WARNING
Gordon Brown will receive a warning tonight from Mike Baunton, president of the EEF (formerly the Engineering Employers' Federation), that costs imposed by Government could drive jobs and business out of Britain. The address to the Chancellor at the group's biennial dinner coincides with much worse than expected manufacturing data, with output down 0.1 per cent in December following a 0.6 per cent drop in November.
ECONOMIC VIEW
BACK FROM A BREAK IN THE SUN TO EURO GLOOM
By Lea Paterson
timesonline.co.uk
… what the UK economy has going for it, and the eurozone has not, is a supportive consumer sector. Consumer demand has been highly resilient in the UK in spite of the various economic challenges of the past few years. Consumer demand in the eurozone, by contrast, has been sluggish. In the eurozone, annual growth in consumer spending since the end of 2000 has averaged about 1 per cent. In the UK it has averaged 3 per cent. Forward-looking surveys of consumer confidence tell a similar story, with British consumers increasingly upbeat about prospects, but eurozone consumers wary of what the future may bring. …
GRAPHIC: CONTINENTAL DRIFT: HOW THE EUROZONE LAGS BEHIND THE UK
timesonline.co.uk
R&SA SELLS EXECUTIVES' LUXURY PALL MALL FLATS FOR £12M
By Jenny Davey and Antonia Senior
timesonline.co.uk
EXECUTIVES at Royal & SunAlliance will lose the right to stay at luxurious apartments at one of London's most exclusive addresses next week as the cash-strapped insurer completes a deal to sell its property in Pall Mall for more than £12 million. …
BUSINESS EDITOR'S COMMENTARY
BA DIVIDENDS STILL OVER HORIZON
By Patience Wheatcroft
timesonline.co.uk
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DOLLAR'S RISE MUST AWAIT US RECOVERY
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Calls for flexibility, now targeted at “major economies or economic areas that lack such flexibility” would make most sense if they were read as a call for Germany to leave the eurozone. They may, however, find more of a response in Beijing. It could suit China's stability strategy to peg the yuan against a wider basket of currencies and ease up against the dollar at the same time. This would be good news for more developed Asian economies, whose exports have been displaced by over-competitive China. It would not bring work back to Düsseldorf, Birmingham or Pittsburgh, or cut America's trade deficit. Like the low point of the dollar, that must wait until US recovery has spread round the globe. …
THE GUARDIAN
FACTORIES STRUGGLE BUT SHOPPERS AID ECONOMY
Larry Elliott, economics editor
guardian.co.uk
Widespread bargain-hunting during the winter sales provided a boost to Britain's retailers last month and helped to offset the damage of a faltering recovery in manufacturing, it emerged last night.
Fresh evidence of the UK's two-speed economy came when upbeat figures for consumer spending from the British Retail Consortium co-incided with the second consecutive monthly fall in factory output. …
'I HATE MAKING PEOPLE REDUNDANT, BUT WE HAVE TO MOVE WITH THE TIMES'
Charlotte Moore
guardian.co.uk
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Trumeter has been making measuring devices since 1937. Its first product allowed textile manufacturers to measure material automatically as it came off the production line.
In the biggest shake-up of the company's 67-year history, it has moved its main production line to Malaysia to take advantage of cheaper labour costs, keeping just a token manufacturing presence at Radcliffe in Manchester, where it is laying off 40 staff, retaining only seven to operate the new assembly line.
"I hate making people redundant. Always have. But we have to move with the times," said Mike Evans, the company's operations manager.
Like other UK manufacturing companies, Trumeter has been forced to change its working practices as price pressure has intensified. …
SAVINGS EDGE BACK IN FAVOUR
Mary O'Hara
guardian.co.uk
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According to the ABI's latest quarterly pensions and savings index, the stock market bounce and a perception that high property prices are making buy-to-let a less attractive investment, have helped restore faith in pensions. …
POPULATION 'TIME BOMB' DISPUTED
John Carvel
society.guardian.co.uk
The charity Age Concern says recent research has debunked the myth that the ageing of Britain's population is a "demographic time bomb" threatening to wreck the economy.
Ministers are worried that, with the number of people aged 16-49 expected to fall by almost a million by 2021 and the number aged 50-69 to rise by 1.5m, there will not be enough workers to support the elderly.
But the charity says the problem could be solved by removing barriers to older people working if they wish. …
THE TELEGRAPH
DOLLAR WILL 'CONTINUE ITS FALL INTO SUMMER'
By Edmund Conway (Filed: 10/02/2004)
telegraph.co.uk
The dollar dropped to a new 11-year low against the pound yesterday as investors abandoned hope that the Group of Seven policymakers would try to arrest its decline in coming months. …
UK analysts fear the manufacturing sector will be harmed by the weak dollar, as exports are dented by the pound's consequent rise. The economy remains supported by the consumer sector, which the British Retail Consortium said yesterday was at its strongest since last April during January. Sales volumes over the month increased by an annual 3.8pc on a like-for-like basis.
However, the manufacturing sector's recovery was cast into doubt yesterday as production fell well below expectations for the second month in a row. …
'ONLY HALF' PENSIONERS CLAIM CREDIT
By Nina Montagu-Smith (Filed: 10/02/2004)
telegraph.co.uk
Only 2.6m of an estimated 5m pensioners are benefiting from the pension credit, launched by the Government last autumn, the Department for Work and Pensions confirmed yesterday. …
THE SCOTSMAN
ENGLISH PROPERTY AVERAGE HITS £163,584
property.scotsman.com
THE average cost of a house in England and Wales is £163,584, new figures show. The price went up 12.6 per cent between the final quarter of 2002 and the same period of 2003, according to the Land Registry. …
KING STURGE SAYS NO EXCUSES LEFT FOR PUTTING OFF INDUSTRIAL MOVE
Jim Dow
property.scotsman.com
KING Sturge is predicting improved occupational demand across most industrial sectors, saying there has been a return of confidence and those who have been delaying a property move have "run out of excuses".
Apart from traditional industrial/warehouse occupiers, King Sturge expects continued demand in the trade counter and self-storage markets with renewed demand in the telecom sector. …
THIS IS MONEY
CITY GROWTH BRINGS BOOST FOR JOBS
Jane Padgham, This Is Money
thisismoney.com
LONDON'S economy started the year in great shape, with business booming and firms hiring new staff.
Although easing slightly from the extremely rapid pace of expansion seen towards the end of last year, growth in business activity in the capital outstripped the national average for the seventh month in a row.
The upbeat findings come in the latest Royal Bank of Scotland London poll, based on the national CIPS/Reuters Purchasing Managers' Report. …
BONUSES BONANZA ON WAY AT UBS
James Rossiter, Evening Standard
thisismoney.com
THOUSANDS of UBS investment bankers in London are in line for a healthy increase in their annual bonuses after a pick-up in deals work sent the bank's profits soaring. …
BBC
PRICES SOAR AS RIVER FALLS
news.bbc.co.uk
The recent success of Bewdley's new £4m flood defences could help to finally lift the battered riverside property market, according to estate agents in the town.
Last week the portable flood barriers passed their first proper test as the River Severn burst its banks.
On Monday homeowners on the north side of the town, where the scheme was introduced in 2002, were told house prices could now soar by up to £25,000. …
RETAILERS SQUEEZED IN JANUARY
news.bbc.co.uk
UK retailers had a busy time in January as sales hit a 10-month high, a survey by the British Retail Consortium has found.
Retail sales were 3.8% higher than in the same month of 2003 if new shop space is excluded, industry body said.
Total sales rose 6.8%, which was also the best performance since April 2003.
But the BRC warned that price cutting by retailers meant that their profit margins were not showing the same healthy growth.
The long sales season and big discounts "hit margins hard for many retailers", the BRC said.
"With so many purchases being postponed until after the Christmas period, these figures cannot be taken as evidence that the recent sluggish trend will not continue," the BRC said.
FIND A PROPERTY
LETTINGS STRONG, SAYS AGENT
Leaders, the UK's largest independently owned letting specialist, say the market end 2003 in a strong position...
findaproperty.com
Leaders' figures reveal that the total number of new lets across its regions in the last quarter of 2003 was similar to that of 2002, and in December 2003 the total number of lets (new and renewed) was up 9% from December 2002.
The company also reports strong rents, with an increase of 3.5% companywide. …
LANDLORDS REMAIN CONFIDENT
Despite the impact of rising rates on their profits buy-to-let landlords remain optimistic about the future...
findaproperty.com
A survey of 2000 investors by the Homebuyer Show reveals that 72% of landlords expect house prices to grow within the next year and 30% predict that prices will continue to grow strongly.
This, however, does not stop over 70% believing interest rates will rise over the next 12 months. But over 50% plan to counteract rising rates by remortgaging. …
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Looking ahead, 82% of existing landlords plan to purchase at least one further property this year. 27% indicated multiple planned purchases.
A flat without a garden is the most popular choice of purchase mainly because they are easier to rent and because there is less maintenance.
The Homebuyer Show ,running from 5-7 March at the ExCel Centre, Docklands …
HOUSE PRICES STILL STRONG
findaproperty.com
The housing market continues to record double-digit price increases according to the latest figures from the Land Registry...
Figures for the final quarter of 2003 confirm what several other sources have already revealed: a revival in the market in the final three months of the year,
The average price of a property in England and Wales increased by 12.6% from £145,251 in 2002 to £163,584 for the same period in 2003.
The fourth quarter's performance reverses a year long trend in which the pace of house price rises declined with every quarter: 29% in the first, 12.5% in the second, and 10.6% in the third. …
Signs of a revival in the final quarter are also evident in the recovery in the number of properties sold, which was up 2% from 295,503 in 2002 to 301,405 for the same period in 2003. …
MORTGAGE INTRODUCER
PROMISCUOUS LANDLORDS PROUD TO BE RATE TARTS
Over 50 per cent of landlords plan to re-mortgage next year according to a Homebuyer Show survey.
mortgageintroducer.com
Over 50% of existing landlords responding to a major Homebuyer Show survey of property investors have declared their intentions to re-mortgage within the next 12 months. 35% reported that they had already re-mortgaged within the past 12 months. ….
72% of landlords expect house prices to grow within the next year with 30% believing prices will continue to grow strongly. This does not stop over 70% believing interest rates will rise over the next 12 months. Also only 14% forecast that their gross rental yield will fall as a result of house price rises, expecting rents will increase to compensate. …
ODPM: HOUSE PRICE INDEX - DECEMBER 2003
mortgageintroducer.com
The average house price in the UK for first time buyers stood at £127,474 in December, while the average price paid by former owner occupiers stood at £186,366.
* The mix-adjusted average house price in the UK in December 2003 stood at £162,689, up from £159,480 in November (not seasonally adjusted).
* UK annual house price inflation in December 2003 was 8.3 per cent, down from 9.7 per cent in November.
* Annual house price inflation in London was 3.8 per cent in December 2003, down from 5.2 per cent in November.
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HOUSE PRICE INFLATION: TYPE OF BUYER
The UK house price inflation rate for first time buyers fell to 6.2 per cent in December from 7.3 per cent in November. The inflation rate for former owner occupiers also fell, from 11.1 per cent in November to 9.6 per cent in December. This is the lowest rate seen this year, and compares with a rate of 25.8 per cent seen in April.
REAL ESTATE INVESTMENT TRUSTS – A POTENTIAL DAMP SQUIB OR THE RENAISSANCE FOR PROPERTY SHARES?
mortgageintroducer.com
The announcement by the chancellor in the December economic statement that the Treasury is considering the introduction of UK Real Estate Investment Trusts (REITs) has generated high hopes within the property industry. …
FIRST 100 LIFETIME COMPLETIONS
Mortgage Express has completed its first 100 Lifetime applications.
mortgageintroducer.com
With a fixed rate of 6.99% response to the product has been overwhelming: completion of the first 100 applications has been quicker than anticipated. …
INSIDE HOUSING
INTEREST RATE HIKE WILL TEST ASSOCIATIONS
insidehousing.co.uk
The ability of the housing association sector to raise extra finance will be affected by increased interest rates announced last week.
The Bank of England confirmed it was raising its base rate by 0.25 per cent to 4 per cent last week.
Housing associations' ability to fund extra housebuilding will be affected by how successfully they have 'hedged' their lending strategies over the past few years when interest rates were in decline. …
THIS IS OXFORDSHIRE
HOUSE PRICES DOWN AGAIN
thisisoxfordshire.co.uk
House prices in Oxfordshire continued to fall during the last three months of 2003 compared with the previous quarter, according to new figures.
The Land Registry statistics show the average price of a house sold between October and December was £229,675 compared with £234,468 in July-September -- a drop of two per cent.
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A partner at Oxford city centre estate agent Cluttons, Harry St John, said: "The slowdown in the rate of increase has definitely been in line with our expectations.
"However we have noticed that prices at the upper end of the market are now beginning to perk up again, perhaps as a ripple effect from London where they are picking up. …
Huw Warren of rural estate agents Smith Woolley said: "I would agree that the rate of increase has definitely slowed from the excessive rises we saw a couple of years ago, but I think most of us are pleased to see that.
"But we have definitely not seen a drop. December was one of our best yet, particularly with houses at the upper end being bought up by people from London." … |
