House prices in the UK hits a 16 year all time high driven by the pandemic

( via — Tue, 29th June 2021) London, UK —

LONDON, June 29 (Reuters) – British house prices jumped by the most in more than 16 years this month, soaring by 13.4% from June 2020, and demand is expected to stay strong while a coronavirus emergency tax break remains in place, mortgage lender Nationwide said.

In monthly terms, house prices were 0.7% higher than in May as buyers rushed to take advantage of the tax incentive and sought bigger homes after their experiences of lockdown.

“While the strength is partly due to base effects, with June last year unusually weak due to the first lockdown, the market continues to show significant momentum,” Nationwide's chief economist Robert Gardner said on Tuesday.

Economists polled by Reuters had expected prices to rise by 13.7% in annual terms and by 0.7% from May.

The tax break, introduced last year as part of British finance minister Rishi Sunak's emergency support for the economy, had originally been due to expire at the end of March.

But the first 500,000 pounds ($693,250) of any property purchase in England or Northern Ireland are now due to remain exempt until the end of June, and a 250,000 pound tax-free allowance will run until the end of September.

“Underlying demand is likely to remain solid in the near term as the economy unlocks,” Gardner said.

“Consumer confidence has rebounded while borrowing costs remain low. This, combined with a lack of supply on the market, suggests further upward pressure on prices. But as we look toward the end of the year, the outlook is harder to foresee.”


As well as the tax break, Sunak's huge jobs support programme is also due to be phased out by the end of September, raising fears of an increase in unemployment.

Nationwide said it was still possible that the shift in demand for larger properties seen during the pandemic would continue to help the market once the tax break is gone.

The lender published a survey last month showing that almost seven in 10 homeowners who were considering a move would be doing it even without the extension of the tax incentive.

Nationwide said house prices were close to a record high relative to incomes, making it harder for first-time buyers to raise a deposit. But mortgage payments were not high as a proportion of pay, due mostly to low mortgage rates.

The Bank of England has said is monitoring the housing market as it weighs up the chances of a broader pick-up in inflation as the economy reopens. 

Last week, the central bank left its key interest rate at an all-time low or 0.1% and made no change to its plan to increase its government bond purchases to 895 billion pounds.

Despite the signs of recovery in Britain's economy, most BoE rate-setters said they wanted to “lean strongly against downside risks to the outlook”.

Nationwide said house prices in London rose at the slowest rate of any region in England during the second quarter of 2021 but they still increased by 7.3%. Northern Ireland was the strongest performing region, with prices up 14% year-on-year.

($1 = 0.7212 pounds)

By William Schomberg

How Instagram Turned Real Estate Upside Down

Source: Bloomberg

Influencers have infiltrated nearly every industry as social media increasingly dictates what we buy and how we buy it. This now includes really big purchases—like an apartment or a house. The real estate business may never be the same. Presented by Fidelity.

Leaseholders benefit as CMA secures deal with Aviva and Persimmon

( via– Wed, 23rd June 2021) London, Uk – –

The Competition and Markets Authority warned other housing firms and investors to fall in line too or face possible legal action.

Leaseholders “trapped” in homes they struggle to sell are among thousands set to benefit after Aviva and Persimmon agreed to changes following an investigation by the competition regulator.

Hundreds living in homes whose freeholds are owned by Aviva will be affected after it said it would remove contract terms which allow ground rents to double every 10 to 15 years.

The ground rents will revert to the original amounts and leaseholders who were affected by the “doubling” clauses will be refunded excess amounts paid, the Competition and Markets Authority (CMA) said.

Thousands more will benefit after house builder Persimmon said it would offer leasehold house owners the option to buy the freehold of their property at the discounted price of £2,000.

Anyone who has already bought a freehold from the company at a higher price will receive a discount, under the agreement.

It follows concerns that homeowners been led to believe they could buy their freehold at a certain price “only to find out later that this price had increased by thousands of pounds with no warning”.

CMA chief executive Andrea Coscelli said: “This is a real win for thousands of leaseholders – for too long people have found themselves trapped in homes they can struggle to sell or been faced with unexpectedly high prices to buy their freehold.

“We now expect other housing developers and investors to follow the lead of Aviva and Persimmon.

“If not, they can expect to face legal action.”

Housing secretary Robert Jenrick said practices such as doubling ground rent “have no place in our housing market” and hailed the settlement as a “hugely important step”.

“We have also introduced legislation that will protect future homeowners by restricting ground rents in new leases to zero and I would strongly urge other developers to follow suit in amending their historic practices,” Mr Jenrick said.

The settlement follows the CMA's launch of enforcement action in September against housing developers Countryside Properties and Taylor Wimpey for using potentially unfair contract terms and Barratt and Persimmon over the possible mis-selling of leasehold properties.

In connection with this it has also been investigating investment firms, including Aviva, that bought a large number of freeholds from Countryside and Taylor Wimpey.

It has now written to the investment groups other than Aviva setting out its concerns and “requiring them to remove doubling ground rent terms from their contracts”.

The CMA said its investigation into Countryside, Taylor Wimpey, Barratt, and those investment groups – Brigante Properties, Abacus Land and Adriatic Land – remained ongoing adding that “it should not be assumed that they have breached the law”.

Responding to the CMA announcement, Persimmon said it had not historically sold leasehold homes in high volumes and largely stopped doing so in 2017.

It said the agreement largely extended existing schemes in place to enable leaseholders to buy their freeholds at below market value.

The CMA wrote to Countryside and Taylor Wimpey in March warning them they could be breaking the law if they continue to include unfair ground rent terms in contracts for new homes.

Campaigners have called for the end of leasehold sales for new-build properties.

Flats are often sold as leaseholds with the freehold held by a separate owner, often the builder, who is entitled to charge ground rent to the homeowner.

The government has pledged to reform the system.

By John-Paul Ford Rojas

Stamp duty break extension see house prices rise at their biggest monthly rate since 2004

( via– Fri, 30th April 2021) London, Uk – –

The tax holiday had been due to end in March but was extended by chancellor Rishi Sunak in last month's budget.

House prices rose at their biggest monthly rate since 2004 in April after Rishi Sunak extended a holiday on stamp duty, according to new figures from lender Nationwide.

Prices climbed by 2.1% compared to March while they were up by 7.1% compared to the same period last year, the report said.

The chancellor introduced a stamp duty exemption on the first £500,000 of property purchases last year after home sales collapsed during the initial months of the pandemic but it had been due to expire in March.

But in last month's budget, Mr Sunak extended the tax break until June, when the threshold will be lowered to £250,000 until September, before returning to £125,000.

Nationwide chief economist Robert Gardner said: “Just as expectations of the end of the stamp duty holiday led to a slowdown in house price growth in March, so the extension of the stamp duty holiday in the budget prompted a reacceleration in April.

The month-on-month price increase of 2.1% was the highest since February 2004. The annual growth of 7.1% was just below the 7.3% seen last December, which was a six-year high.

Mr Gardner said the housing market looked set to remain “fairly buoyant” over the next six months thanks to the stamp duty holiday as well as continued government job support measures.

Demand for moving home is also being motivated by changing housing preferences in the wake of the pandemic, Mr Gardner added.

Many are swapping the convenience of living close to the cities where they work for the comfort of having a larger home further out as they spend more time there.

Meanwhile supply of homes for sale remains constrained, adding to the pressure on prices.

But Mr Gardner added: “Further ahead, the outlook for the market is far more uncertain.

“If unemployment rises sharply towards the end of the year as most analysts expect, there is scope for activity to slow, perhaps sharply.”

Howard Archer, chief economic advisor to the EY ITEM Club, said: “We believe the strength of the housing market is excessive relative to the economic fundamentals, and the level of prices will ultimately prove unsustainable.”

By John-Paul Ford Rojas

House prices rose at their fastest annual pace in more than six years in February before stamp duty holiday extended

( via– Wed, 21st April 2021) London, Uk – –

Official figures show the average cost of a UK home at £250,000 – up almost 9% in the year to February.

House prices rose at their fastest annual pace in more than six years in February, the month before the chancellor extended the stamp duty holiday for buyers in England and Northern Ireland.

The Office for National Statistics (ONS) reported growth of 8.6% over the 12 months.

The figures showed it was the highest rate since October 2014, leaving the average house price at £250,000 – a rise of £20,000 over the 12 months.

While England led the way with 8.7%, all UK regions saw strong rates of annual growth.

Wales recorded a jump of 8.4% while Scotland and Northern Ireland saw prices jump by 8% and 5.3% respectively.

Each has benefited from national government-led stimulus to bolster activity and counter the effects of the COVID-19 crisis.

While support in Scotland ended at the end of March, chancellor Rishi Sunak announced at the budget that England and Northern Ireland would continue to benefit from a stamp duty holiday beyond the end of March to 30 June.

From 1 July, the threshold from which the tax becomes payable falls to £250,000 from the current £500,000.

It reverts back to the usual level of £125,000 from October.

Support in Wales is due to end on 30 June.

Tax holidays and pent-up demand have combined to drive extraordinary levels of activity, according to the most recent data, with buyers clamouring for properties with gardens.

Nitesh Patel, strategic economist at Yorkshire Building Society, said: “Available properties appear to be getting snapped up quickly, adding upward pressure on prices.

“Buying behaviour continues to be dominated by the pursuit for space, with detached homes rising by 9.1% in the year to February 2021, in contrast with flats and maisonettes, which saw a 6.7% increase over the same period.

Separate figures from HM Revenue and Customs showed sales were around double the number seen in March 2020 last month, reporting 190,980 completions.

The property website Rightmove said on Monday that asking prices had leapt by more than 2% in just a month as a result of the frenzy.

Its report was released on the same day that the government moved to give additional help to people to buy their own home through a Treasury-backed mortgage scheme offering deals with deposits as low as 5%.

George Franks, co-founder of London-based estate agents Radstock Property, described the stamp duty holiday as “the bricks and mortar equivalent of steroids” in terms of its effect on the property market.

He added: “Demand has gone through the roof and that, coupled with exceptionally competitive mortgages rates and low supply, has driven average prices ever higher.

“Yes, tax hikes and rising unemployment will almost certainly temper demand at some point, but changing living requirements will counteract that to an extent.”

By James Sillars

UK home movers have a spring in their step, with stamp duty holiday extension, says Halifax

( via – – Fri, 9th April 2021) London, Uk – –

The extension of the stamp duty holiday put a “spring in the step” of home movers in March, according to the UK's biggest mortgage lender.

The Halifax, part of Lloyds Banking Group, said there was “something of a resurgence” in the UK housing market in March.

Extensions to stamp duty holidays in England, Northern Ireland and Wales were key to the rise in activity.

As a result, the average house price was 6.5% higher than a year ago.

It meant the typical home was valued at £254,606 in March.

Although rising house prices will be welcomed by some, it will frustrate those wanting to buy a home for the first time – particularly if Covid uncertainty has affected their income and ability to borrow through a mortgage.

There was some support announced in the Budget as a government guarantee means first-time buyers should get a wider choice of mortgages that require a deposit of just 5% of the loan.

The economic fallout of the pandemic could affect longer-term pricing of property, according to Russell Galley, managing director at the Halifax.

“With the economy yet to feel the full effect of its biggest recession in more than 300 years, we remain cautious about the longer-term outlook,” he said.

“Given current levels of uncertainty and the potential for higher unemployment, we still expect house price growth to slow somewhat by the end of this year.”

Defying expectations

The Halifax said that UK house prices rose by 1.1% in March compared with February, according to figures based on the lender's own mortgage data.

That meant they had risen in cash terms by £15,430 over the last year – a 12 months dominated by Covid, with various lockdowns and other restrictions.

“Casting our minds back 12 months, few could have predicted quite how well the housing market would ride out the impact of the pandemic so far, let alone post growth of more than £1,000 per month on average,” Mr Galley said.

Anna Clare Harper, chief executive of asset manager SPI Capital, suggested that lockdowns and rising living standards had encouraged existing owners to buy bigger properties.

However, she said inequality among generations and incomes meant many would need to rent instead, which could increase demand in that sector.

The UK housing market is judged by average prices, but there are a host of local markets in which schools, housing development and regional employment that can affect property values.

By By Kevin
Peachey Personal finance correspondent

Builders told to remove ‘unfair’ ground rent terms by UK competition watchdog

( via – – Fri, 19th March 2021) London, Uk – –

Housebuilders Countryside and Taylor Wimpey have been told to change their leasehold contract terms by the UK competition watchdog or face legal action.

The Competition and Markets Authority (CMA) said the “unfair” terms, which double ground every 10 to 15 years, “trap” people.

It said the contract means people can struggle to sell or mortgage homes.

The builders said they had already taken steps that address the issue.

The CMA said it had concerns that the clauses in the contracts may break consumer protection law. They must be removed and not used again, it said.

“These ground rent terms can make it impossible for people to sell or get a mortgage on their homes, meaning they find themselves trapped,” said CMA chief executive Andrea Coscelli.

“This is unacceptable. Countryside and Taylor Wimpey must entirely remove all these terms from existing contracts to make sure that they are on the right side of the law.”

He added: “If these developers do not address our concerns, we will take further action, including through the courts, if necessary.”

The watchdog is also looking into Barratt Developments and Persimmon Homes contracts.

The difference between a freeholder and a leaseholder

Someone who owns a property outright, including the land it is built on, is a freeholder.

With a leasehold, the person owns a lease, which gives them the right to use the property. But they still have to get their landlord's permission for any work or changes to their homes.

When a leasehold flat or house is first sold, a lease is granted for a fixed period of time, typically between 99 and 125 years – but sometimes up to 999 years. People may extend their lease or buy the freehold, but this can be complicated and expensive and involve legal fees.

Leasehold house owners are also often charged expensive ground rent, as well as fees if they want to make changes to their homes. A leasehold house can also be difficult to sell.

Campaigners have called for leaseholds to be banned on new builds, and the government has said previously it would work to end the practice.

Housing Secretary Robert Jenrick said unfair practices, including crippling ground rents, have “no place in our housing market”.

He added: “This behaviour must end and I look forward to appropriate redress being forthcoming for leaseholders.”

Taylor Wimpey said: “We will continue to cooperate with the CMA and work with them to find a satisfactory resolution, within the required timescale.”

The housebuilder added that it stopped selling leases that doubled ground rent every ten years on new developments from 1 January 2012.

In 2017 it launched a voluntary help scheme that covers the cost of converting terms so ground rents are linked to rises in the retail price index (RPI) measure of inflation and set aside £130m to cover the cost of lease conversions.

The company said a “significant number” of Taylor Wimpey customers have already used this scheme and it remains open.

Countryside said it had “sold no properties with doubling ground rent clauses since 2017” and that it had an assistance scheme for people who charges doubled more than every 20 years.

It said it would “continue to engage constructively with the CMA to resolve this complex issue.”

‘Feudal system'

The National Leasehold Campaign (NLC), which wants to abolish new-build leasehold, said that Taylor Wimpey and Countrywide were “two of the worst offenders in the leasehold scandal”.

NLC founder Katie Kendrick said the campaign was “delighted” with the CMA's stance.

However, she said that ground rents “are only one of the ways for freehold investors to make money at the expense of leaseholders.”

“Leaseholders are navigating a feudal system that is stacked against them, with rip-off permission fees, escalating service charges and, for many new build estates, estate management fees.

“The big developers could do more to provide redress for the systematic mis-selling of leasehold homes; they choose not to,” she added.

House prices climbed 8.5% in 2020 amid tax holiday

( via – – Wed, 17th Feb 2021) London, Uk – –

UK house prices climbed 8.5% in 2020, the highest annual growth rate since October 2014, according to official figures.

The average UK house price reached a record high of £252,000 in December 2020, the Office for National Statistics said.

The North West had the highest growth of 11.2%, while London rose just 3.5%.

The stamp duty holiday due to end this March contributed to the rise, the ONS said.

Spending more time at home in the pandemic meant some people also decided they needed more space.

That was reflected in the average price of detached properties climbing by twice as much as flats and maisonettes during 2020, up 10% and 5% respectively.

Meanwhile Wales experienced the fastest price growth, with property values rising 10.7% to £184,000.

In England, prices climbed 8.5% to £269,000, in Scotland, 8.4% to £163,000 and in Northern Ireland 5.3% to £148,000.

“Recent price increases may reflect a range of factors including pent-up demand, some possible changes in housing preferences since the pandemic and a response to the changes made to property transaction taxes across the nations,” the ONS said.

Regional variations

The UK housing market is made up of lots of local markets, with different factors affecting property prices such as the performance of schools and the availability of jobs. The ONS figures are based on sale completions.

Although average London prices were up by 3.5%, over last year, prices fell in the capital by £5,000 between November and December, despite a UK-wide price increase of 1.2% over the month.

But the city still has the highest average house price in the UK, at £496,000.

The North East continued to have the lowest average house price at £141,000, and has become the final English region to surpass its pre-economic downturn peak of July 2007.

Cheap debt

“2020 was the year that fundamentals came home to roost,” said Nicky Stevenson, managing director at estate agent Fine & Country.

“There was no escaping a lack of space for households who suddenly found they were living on top of each other with little respite. That has powered annual growth that reached a six-year high.”

There were four major drivers of overall house price rises in 2020, said Anna Clare Harper, chief executive of asset manager SPI Capital.

“The temporary stamp duty reduction and cheap debt as a result of very low interest rates, which give buyers a ‘discount'; the release of pent-up supply and demand and desire to improve surroundings amongst existing homeowners; and the ‘flight to safety', since in times of uncertainty, people want to keep their money in a stable asset with low volatility.

“But looking to the future when the temporary stamp duty reduction ends, we're likely to see a slowdown in house price rises,” she said.

“However, there is still some life in the market as lockdown helps to concentrate many potential buyers and sellers' minds as far as moving is concerned,” said north London estate agent Jeremy Leaf.

“Intense speculation remains as to whether the 31 March stamp duty deadline will be extended and we can't help but have sympathy for many who have started the process several months ago who have been unavoidably delayed by a backlog in searches, surveys, conveyancing, or all three, to say nothing of problems in the new-build industry.”

By Simon Read

Low-deposit mortgages return as markets emerge from Covid-related slowdown

( via – – Wed, 20th Jan 2021) London, Uk – –

Low-deposit mortgages have made a return as the market emerges from a Covid-related slowdown.

Mortgage products for homeowners with a deposit of 10% of their property's value have risen more than fourfold compared with last summer's low.

The increase, based on figures from financial information service Moneyfacts, could offer some relief to first-time buyers.

But the cost of mortgages will remain an issue for many.

‘Homeownership dreams'

In early September last year, there were only 44 mortgage products available for those able to offer a 10% deposit. At the same time, first-time buyers putting money aside for a deposit were faced with pressures of poor savings rates and rising house prices.

That choice has now risen to 197 products, according to the Moneyfacts figures, with some big lenders returning in recent weeks.

Mortgage products for those able to offer a 15% deposit have also risen sharply, although the choice was already much greater.

“First-time buyers who may have been concerned that with record low savings rates and increasing house prices, their homeownership dreams may have had to be shelved, may have been pleased to note that we are now seeing some providers return products for those with 10% deposits,” said Eleanor Williams, from Moneyfacts.

Lenders had been grappling with the practical effects that the coronavirus pandemic brought to their business.

While some new businesses targeted first-time buyers on social media, many traditional lenders withdrew products from the market.

Staff shortages, and employees working from home, meant they were unable to process applications as fast as they had before the pandemic.

There were also concerns among lenders that, despite strong activity in the housing market, riskier – and younger – first-time buyers could find it difficult to make mortgage repayments during an economic slowdown caused by the pandemic.

Research has shown that younger workers are more at risk of redundancy.

Aaron Strutt, from mortgage broker Trinity Financial, said lenders were now working more efficiently despite staff still being at home.

He said that some of the biggest mortgage lenders had returned to the market. Some of the mortgage rates they were offering were not as attractive as they had been, but competition would help push down costs.

“If you are planning to purchase a property and have a 10% deposit the mortgage rates are not as cheap as they used to be, but they are getting better,” he said.

Many thousands of existing mortgage-holders who had struggled to make their repayments during the pandemic had taken payment “holidays”, which are deferrals on payments.

The latest figures from UK Finance, which represents lenders, show that 130,000 mortgage payment holidays were in place at the end of December 2020, down from a peak of 1.8 million in June last year.

By Kevin Peachey
Personal finance correspondent

Stamp duty holiday increase 650,000 home sales across the UK, says Rightmove

( via – – Mon, 16th Nov 2020) London, Uk – –

Stamp duty holiday has kept demand high despite second lockdown in England

About 650,000 homes in Great Britain are in process of being sold, the property website Rightmove has estimated, with the stamp duty holiday increasing activity in the most expensive regions.

The listing website said the number of sales agreed was up by 50% year on year in October across the board, and in the east of England the figure was up by 72%.

Despite the second lockdown in England, and the two-week circuit-breaker lockdown in Wales, it said demand for properties had remained high.

As a result, it said it believed 650,000 properties were at some stage between being under offer and sold, a figure that is 67% higher than the same period last year.

Recently, there have been about 1.2m sales each year in the UK. Until a sale is completed, it is not recorded, so it is difficult to say accurately at any time how many transactions are in progress.

Rightmove made its estimate using the number of agreed sales listed on its site, and projections for how many units are in plots listed by developers.

Some properties may be listed with more than one agent, and some of the deals will break down before a sale is completed. However, the snapshot gives an idea of how busy the market has been since being frozen during the first national lockdown, and hints at how long sales are taking to complete.

The demand for homes, coupled with Covid restrictions that have made it harder to carry out valuations, and the redeployment of some council staff, has slowed the homebuying process in some parts of the country.

Rightmove said about a third of transactions in the pipeline would still be exempt from stamp duty after the holiday ends, but there could be problems for the others.

The holiday, which means there is no tax for people buying a main home for up to £500,000 in England and £250,000 in Scotland and Wales, was introduced in the summer to support the housing market.

The tax break has fuelled a market that was already booming after the spring lockdown, and has continued to operate in England despite the new measures to tackle Covid.

Tim Bannister, the Rightmove director of property data, said: “After some brief hesitation as people waited for the detailed government guidance and legislation, it’s now clear that home movers are carrying on with their searches and sales during this second lockdown in England with the market staying open.

“This ongoing activity means that the processing logjam continues to pile up because of the sheer number trying to reach the finish line by the end of March.”

David Greene, the president of the Law Society of England and Wales, which represents conveyancing solicitors, said the residential housing market was facing many pressures.

“The end of the stamp duty land tax holiday coincides with the busy Easter holidays period – a popular time to move – and the end of the help-to-buy scheme in its current format,” he said.

“An extension to the SDLT holiday deadline, or introducing appropriate transitional arrangements, would help release the growing pressure on the conveyancing system that is being experienced by buyers and sellers [as well as solicitors].”

Rightmove’s data showed the average asking price for a property coming on to the market in November was down by 0.5% on October’s figure, at £322,025. However, it remains 6.3% higher than in November 2019 and on track to hit the site’s revised prediction of a 7% increase in 2020.

Across all regions of Britain asking prices are higher than a year ago, although some areas have reported waning demand from buyers.

Rightmove’s figures show that in some of the priciest parts of London this has translated to new sellers asking lower prices than in 2019. The biggest drop is in Tower Hamlets, where asking prices are 5.5% lower a year ago at an average of £559,826. There are also falls in Westminster, Southwark and Kensington & Chelsea – all areas popular with overseas investors and City workers.

Lloyds Banking Group cashes in on UK’s mortgage boom

( via – – Thur, 29th Oct 2020) London, Uk – –

Lending rose £3.5bn in Q3 after bank processes highest number of applications since 2008

Lloyds Banking Group reported stronger-than-expected profits after the UK’s largest mortgage lender cashed in on a surge in demand for home loans.

The bank, which owns Halifax and accounts for roughly 19% of the UK mortgage market, said mortgage lending increased by £3.5bn over the three months to September, as it processed the highest number of applications since 2008.

The housing market has boomed since a temporary stamp-duty holiday and a so-called race for space, as many people have been reconsidering their lifestyles during the Covid-19 pandemic.

Chief executive António Horta-Osório said Covid restrictions, which have forced people to spend more time at home, prompted demand for larger homes outside city centres. Meanwhile, lockdowns have resulted in consumers spending less on going out, but saving more of their earnings for home purchases.

“People have been saving through the pandemic, given that they spent less on travel and hospitality… So there is also structural shift in customer behaviour,” he said.

The bank is expected to profit from further demand in the final three months of the year. “We already know that this strong mortgage growth in Q3 is going to accelerate into Q4 and we are absolutely on it,” the chief executive added.

The boost in mortgage and business lending helped lift pre-tax profits, which were £1bn for the quarter. Analysts had been expecting profits of £588m.

It is also a significant improvement on the £50m profit reported during the same period last year, when the bank was forced to put aside large sums linked to payment protection insurance claims, which nearly wiped out its earnings.

Despite the bank’s strong performance Lloyds’ chief financial officer, William Chalmers, cautioned that an economic downturn in the UK had merely been delayed from the end of 2020 and into 2021. “The downturn is expected to come, but it is expected to come slightly later,” he said.

The Bank of England has warned lenders to prepare for negative interest rates, prompting Lloyds’ rival HSBC to warn it may start charging for current accounts in countries such as the UK to help make up for the drop in income.

Lloyds suffered a 16% drop in net interest income – which measures the difference between interest earned on loans versus paid on deposits – to £2.6bn after UK interest rates were cut to a record low of 0.1% in March.

Horta-Osório said Lloyds’ position on current account fees was unchanged, adding that the central bank would likely announce further quantitative easing before introducing negative rates.

Lloyds put aside a further £301m to cover a potential surge in bad debts linked to the Covid crisis, but this was less than half the amount analysts had expected.

The provision brings the bank’s total impairment charge to £4.1bn for the first nine months of the year. It now expects the full year total to be at the lower end of the £4.5bn-£5.5bn it predicted in the summer.

However, Lloyds said there was “significant uncertainty” around the economic outlook due to both the ongoing pandemic and Brexit. “The extent of the impairment charge at the full year will depend on the potential severity and duration of the economic shock in the UK.”

Lloyds shares rose 2.5% in morning trading to 28.36p. The banks’ stock price has dropped around 50% since February.

By Kalyeena Makortoff 

John Lewis to build rental homes in strategic plan to rebuild profits

( via – – Fri 16th, Oct 2020) London, Uk – –

Retailer’s plan is part of strategy to rebuild profits to £400m within five years

John Lewis is to become a major landlord, aiming to build rental homes at 20 of its sites around the UK as part of a strategy to rebuild profits to £400m within five years.

The retailer, which also owns Waitrose, said the new homes could be built above or beside stores or on other land it owns, and would be furnished with products from John Lewis department stores. Residents would also be able to order food deliveries from Waitrose supermarkets. It is aiming to make planning applications for two sites in Greater London in the new year.

“We’re a landlord already at three of our properties, so this is an obvious extension for us. And we’re now talking to developers and investors who can help us achieve our ambitions,” the company said.

It is launching a new strategy under the chairman, Sharon White, who is aiming to pull the company back from what is expected to be its first-ever annual loss in the current financial year.

As well as moving into the home rental market, John Lewis plans to add more financial services and is looking at extending its horticultural offering, possibly via acquisitions. These new areas are intended to boost retail profits, which it said would no longer be sufficient to “pay the wages we would like, or invest in our customers and communities”.

The retail group is also investing £1bn in extending its online services, including increasing delivery capacity for Waitrose by almost a third to 250,000 a week. It said up to 70% of its sales were likely to be online within five years.

Other measures include ditching its “never knowingly undersold” pledge, which will be replaced by a different “value for money” promise to be finalised next year.

The company is also stepping its environmentally beneficial services, including products that can be taken back or sold back to the store in every category stocked by its John Lewis department stores by 2025.

The group, which is owned by its employees, known as partners, said it was aiming to make £400m in profit by 2025 and would pay every staff member the independently verified real leaving wage by the time it had achieved £200m in profit.

But it also paved the way for further potential job cuts as it said it wanted to save £300m in costs a year by making its head office and other operations “simpler and more efficient”.

White said: “We’ve seen five years of change in the past five months and Waitrose and John Lewis have responded with great agility. Our plan means the John Lewis Partnership will thrive for the next century, as it has the last.

“We’re adapting successfully to how customers want to shop today, while showing the partnership is improving lives and building a more sustainable future. We’ll share our success with our customers, partners – who own the business – and our communities.”

By Sarah Butler 

Mortgage applications In the UK at its highest in 12-years as house prices keep rising

( via – – Wed, 7th Oct 2020) London, Uk – –

Desire for more space on back of Covid homeworking fuels housing market, says Halifax

Mortgage applications in the UK have surged to a 12-year high as house prices rose at the fastest annual pace since mid-2016, the mortgage lender Halifax has reported.

Halifax, which is part of Lloyds Banking Group, the UK’s biggest mortgage lender, said the market was fuelled by a desire for more space, with more people working from home during the Covid-19 pandemic, but warned that rising unemployment and recession would suppress demand further out.

The average price of a home rose by 1.6% to £249,870 in September from August, marking the third consecutive month of substantial gains, Halifax said. This pushed the annual growth rate to 7.3%, the fastest since June 2016, from 5.2% in August.

Russell Galley, the managing director of Halifax, said: “Few would dispute that the performance of the housing market has been extremely strong since lockdown restrictions began to ease in May. Across the last three months, we have received more mortgage applications from both first-time buyers and home movers than anytime since 2008.

“There has been a fundamental shift in demand from buyers brought about by the structural effects of increased homeworking and a desire for more space, while the stamp duty holiday is incentivising vendors and buyers to close deals at pace before the break ends next March.”

Data from the Bank of England last week showed that mortgage approvals had risen to the highest level in almost 13 years in August and the mortgage lender Nationwide, the UK’s biggest building society, also reported that house prices in September rose at the fastest annual rate since the aftermath of the Brexit vote in 2016.

The housing market has bounced back in recent months after grinding to a halt during the coronavirus lockdown in March and April when viewings and house moves were banned. Demand has returned, for now, helped by temporary cuts to stamp duty. However, economists are warning of a big rise in unemployment after the government’s furlough scheme ends on 31 October.

Galley said the release of pent-up demand and the stamp duty holiday could only be temporary fillips. “It is highly unlikely that the housing market will continue to remain immune to the economic impact of the pandemic. And as employment support measures are gradually scaled back beyond the end of October, the spectre of increased unemployment over the winter will come into sharper relief.

“Therefore, while it may come later than initially anticipated, we continue to believe that significant downward pressure on house prices should be expected at some point in the months ahead as the realities of an economic recession are felt ever more keenly.”

By Julia Kollewe

UK construction industry unexpectedly picked up in September – PMI

( via — Tue, 6th Oct, 2020) London, UK —

LONDON (Reuters) – Britain’s construction industry unexpectedly picked up speed in September, helped by a post-lockdown bounce in the housing market, a survey showed on Tuesday.

The IHS Markit/CIPS UK Construction Purchasing Managers’ Index accelerated to 56.8 from 54.6 in August, above all forecasts in a Reuters poll of economists which had pointed to a slight slowing.

“Following August’s slowdown, growth in UK construction activity rebounded strongly in September,” Eliot Kerr, an economist at IHS Markit, said.

“Forward-looking indicators point to a sustained rise in activity, with new work increasing at the quickest pace since before the lockdown and sentiment towards the 12-month outlook at its strongest for seven months.”

Construction firms continued to cut jobs, although at a significantly slower rate than in August.

Increases in activity in home-building – which reported the fourth sharp monthly increase in a row – and in commercial construction more than offset a fall in civil engineering work.

Britain’s housing market has boomed since coronavirus restrictions were lifted in May, driven by a tax cut, pent-up demand from earlier in the year and demand for more spacious homes after the lockdown.

Some industry officials have warned that the housing market recovery is likely to run out of steam with unemployment likely to rise as the government pares back its job support programmes.

The all-sector PMI – a combination of the construction, services and manufacturing surveys – fell back to 56.6 from August’s six-year high of 58.7, reflecting slower growth in Britain’s dominant services industry.

Reporting by William Schomberg

Londoners increasingly looking for jobs outside the capital, says job site

( via – – Fri, 25th Sept 2020) London, Uk – –

Wave of ‘reverse commuters’ in prospect as number of jobseekers looking further afield jumps 27%

Londoners are increasingly looking for jobs outside the capital as the city’s economy stalls, one of the UK’s largest recruitment sites has found, raising the prospect of a wave of “reverse commuters” or a continued exodus of residents.

Figures from Indeed, based on millions of job adverts and searches, show that on 18 September, the number of posts advertised in London was down by 55% on the same date in 2019.

The sharp decline reflects the impact of closed offices and reduced hospitality services on the city’s jobs market.

Many restaurants, hotels and shops in business and tourist areas remain closed or are operating at a reduced capacity.

With vacancies thin on the ground, Indeed said more jobseekers living in London were now looking for work elsewhere. In August, the number looking outside London was up by 27% year on year, and by 30% compared with the start of the year.

The most popular search locations were parts of the home counties, with Essex top of the list, followed by Kent and Surrey, suggesting that people were willing to commute to work, at least in the short term.

The roles being searched for were typically lower-paid, with the top five being cleaner, customer service representative, warehouse worker, retail assistant and sales assistant.

However, jobseekers may struggle to find work in those areas. When the website looked at the areas recording the biggest fall in adverts, Scotland followed London with a 51% drop, but next on the list was the south-east of England with a similar-sized fall.

Jack Kennedy, Indeed’s UK economist, said the prolonged absence of commuters and tourists from central London was “weighing down” the pace of job creation in the capital.

“While London’s flagship financial and tech sectors are still recruiting, the types of job that Londoners are searching for most commonly outside London tend to be roles that were long abundant in the capital – from retail to cleaning work – but which are now scarcer,” he said.

“Most are looking for work in areas within commuting distance of London. This raises the prospect of a new type of worker: the reverse commuter who lives in London but travels out of the capital for work.”

High London rents and house prices mean that many people previously working in these roles in the centre of the city could be living in boroughs near to where they are now looking for work. up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

Letting agents and property websites have reported a surge in the numbers of tenants and homeowners looking to move out of London, and the jobs market could be driving some of this movement.

Neal Hudson, a housing market analyst, said there was evidence that people in so-called elementary jobs lived in the affordable boroughs, typically on the outskirts.

“There is a question over whether these people will stick with where they live or look to move out closer to the work (if it exists) and also whether the transport infrastructure can support these reversals in commuting patterns,” he said.

By Hilary Osborne

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Projects to build up to 45,000 new homes given green light ahead of planning shake-up

( via – – Tue, 4th Aug, 2020) London, Uk – –

Treasury to allocate £900m to over 300 ‘shovel ready’ schemes and infrastructure projects

Robert Jenrick and Boris Johnson have promised major reforms to planning laws in England to build more homes. 

Projects to build up to 45,000 new homes are to get the green light as part of the latest round of investment from Boris Johnson’s promised “New Deal” ahead of a radical planning shake-up expected this week.

The Treasury is to allocate £900m from funds announced in Rishi Sunak’s budget to more than 300 so-called “shovel ready” schemes, which include the homes, new commercial space and infrastructure projects such as a high-speed rail station in Kent.

The housing secretary, Robert Jenrick, said the investment would be“laying the foundations for a green economic recovery”.

Jenrick and the prime minister have promised major changes to planning laws in England, to be formally announced in the coming days, under which new homes and hospitals could be granted automatic planning permission to speed up building.

Under the plans, local councils will be asked to designate land either as “growth”, “renewal” or “protection”. New developments will be granted automatic permission on “growth” land and “renewal” areas will see developments given “permission in principle” subject to some checks. Only areas given the “protection” status, including the greenbelt, will not have automatic building rights.

The forthcoming reforms have led to warnings from housing charities about the potential risk of low-quality homes.

The government has also confirmed a £360m investment in Mayoral Combined Authority areas such as Greater Manchester and the West Midlands to build 26,000 more homes while protecting greenfield sites, with a further £8m earmarked to speed up the delivery of these new homes on brownfield sites.

The business and energy department also detailed its plans to fund up to two-thirds of the costs of green home improvements for more than 600,000 homes.

Tradespeople must register for TrustMark accreditation for improvements from wall insulation, floors and roofs to the installation of low-carbon heating. Households on low income can receive vouchers covering 100% of the cost of the improvements, up to a maximum of £10,000.

The investment is part of the £5bn New Deal spending announced in June, part of the £600bn-plus Sunak allocated in his March budget for capital projects over the next five years.

By Jessica Elgot Chief political correspondent

House prices bounced back in July, says Nationwide

( via – – Fri, 31st July 2020) London, Uk – –

House prices bounced back in July, climbing 1.7% during the month compared to a 1.5% fall in June, according to the Nationwide.

“The bounce back in prices reflects the unexpectedly rapid recovery in housing market activity since the easing of lockdown restrictions,” it said.

Activity has been boosted by pent-up demand and the stamp duty holiday.

But the lender warned: “There is a risk this proves to be something of a false dawn.”

The average price in July was £220,936, according to the Nationwide. However, while prices were up 1.5% from a year earlier, July's price was 1.6% lower than in April at the beginning of lockdown.

However, it was a marked change to June's prices when the market posted its first annual fall in eight years.

The rebound in prices reflected a number of factors, said Robert Gardner, Nationwide's chief economist.

He said pent up demand was coming through, from people who had already decided to move before lockdown began. But some people were moving because of their lockdown experience, he said.

“Behavioural shifts may be boosting activity, as people reassess their housing needs and preferences as a result of life in lockdown,” he said.

“Moreover, social distancing does not appear to be having as much of a chilling effect as we might have feared, at least at this stage.”

He said the upward trends look set to continue in the near term, and will be further boosted by the recently-announced stamp duty holiday.

But he added a note of caution. “Most forecasters expect labour market conditions to weaken significantly in the quarters ahead as a result of the after effects of the pandemic and as government support schemes wind down.

“If this comes to pass, it would likely dampen housing activity once again in the quarters ahead.”

Lenders cautious

Mark Harris, chief executive of mortgage broker SPF Private Clients, also warned that the future may not be so positive for the housing market.

“Lenders remain keen to lend but also cautious as to borrowers' financial positions, given the impending end of the furlough scheme and a number of redundancies which have already been announced,” he said.

Anna Clare Harper, author of Strategic Property Investing, warned: “What no one can forecast is what happens next, with some nerves among homeowners, investors and economists as to what the future may hold.”

Jonathan Hopper, chief executive of Garrington Property Finders, said lockdown would have a lasting effect on the property market.

“Like so much else that has been transformed by the pandemic, the property market map is being redrawn as people reassess what they want from their homes and when, or even if, they need to travel to work,” he said.

“Three months of being cooped up in the same four walls has led many people to consider a move.”

By Simon Read Personal finance reporter

UK property values down by 0.1% compared with June 2019 – Nationwide

( via – – Wed 7th July 2020) London, Uk – –

Property values down by 0.1% compared with June 2019, says Nationwide

Annual house price growth ground to a halt in June, with property values down by 0.1% year on year, according to Nationwide building society.

It was the first time annual house price growth has been in negative territory since December 2012, with a month-on-month fall of 1.4% taking the average UK house price to £216,403. The monthly fall was less severe than a 1.7% decline recorded in May.

Robert Gardner, Nationwide’s chief economist, said: “It is unsurprising that annual house price growth has stalled, given the magnitude of the shock to the economy as a result of the [coronavirus] pandemic.

“Economic output fell by an unprecedented 25% over the course of March and April – almost four times more than during the entire financial crisis.

“Housing market activity also slowed sharply as a result of lockdown measures implemented to control the spread of the virus.”

Gardner said that as lockdown measures eased, housing market activity was likely to edge higher in the near term, albeit remaining below pre-pandemic levels.

He added: “Nevertheless, the medium-term outlook for the housing market remains highly uncertain. Much will depend on the performance of the wider economy, which will in turn be determined by how the pandemic and restrictions on activity evolve.”

As well as releasing monthly house price figures for the whole of the UK, Nationwide published quarterly figures, looking at house price growth across the UK’s nations and regions.

Gardner said no UK regions had price falls when comparing April, May and June with the same period in 2019.

He said: “The north-west was the strongest performing region, with annual price growth picking up slightly to 4.8%.”

He said average house prices in London were just 3% below all-time highs recorded in 2017 and 55% above their 2007 levels.

Across the UK, house prices remain 19% higher than in 2007.

Gardner said: “Scotland was the strongest performing nation in quarter two, with annual price growth picking up to 4.0%.

“Conditions remained subdued in Wales and Northern Ireland, which saw annual price growth of 1.0% and 0.1% respectively.”

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said: “Prices are being kept in check by affordability issues and more supply gradually becoming available.

“But demand is picking up as some buyers emerge from enforced confinement in unsuitable property and/or relationships to take advantage of continuing low interest rates, while sellers are more realistic.”

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