Aviva agrees £3.6bn deal to buy Direct Line; new bid to buy Thames Water – business live

The average price of a house in the UK has hit a record high as homeowners experience a fifth successive month of increases in the value of their properties, Britain’s biggest mortgage lender has said.

Halifax’s monthly house price index found that the cost of an average home stood at £298,083 in November, up almost £5,000 on the previous record set in October.

Prior to the latest rise, the record average house price was set in June 2022, at 293,507.

House prices increased by 1.3% in November, the biggest increase this year and the fifth consecutive monthly rise.

On an annual basis property prices are up 4.8%, the highest rate of increase since November 2022.

Amanda Bryden, the head of mortgages at Halifax, said:

Latest figures continue to show improving levels of demand for mortgages, as an easing in mortgage rates boost buyer confidence. However, despite these positive trends, many potential buyers and movers still face significant affordability challenges and buyer confidence may be tested against a changeable economic backdrop.

As we move towards the end of the year and into 2025, positive employment figures and anticipated decreases in interest rates are expected to continue supporting demand. This should underpin further house price growth, albeit at a modest pace as borrowing costs remain above the average of a few years ago.

You can read the full story here:

Trains across Great Britain may be disrupted this morning because of a nationwide fault with the radio systems used by drivers to communicate with signaller, National Rail has reported.

National Rail, which is run by train operating companies, said that all National Rail routes may be affected, in a statement on its website. It said it was investigating the problem.

It said:

There is a nationwide fault with the communication system used between train drivers and signallers. As a result, services across the National Rail network may be subject to disruption this morning.

Trains across the network are having to start their journeys later because of this fault and some may also be subject to cancellations or alterations. Please check before you travel, allow extra time for your journey and monitor live departure boards.

The lines affected included London’s Elizabeth line – Britain’s most popular line – ScotRail, and services across England.

National Rail said the problem was with the GSMR system, or the Global System for Mobile Communications-Railway. The technology is designed to deliver “digital, secure and dependable communications between drivers and signallers” including within tunnels and deep cuttings, according to Network Rail, which runs the UK’s rail tracks.

Good morning, and welcome back to our love coverage of business, economics and financial markets (after a two-day break).

FTSE 100 insurer Aviva has agreed to buy rival Direct Line in a £3.6bn cash and shares deal after a sweetened offer.

Direct Line’s board said that it would be minded to accept the offer of £2.75 per share, up from Aviva’s first bid of £2.50 per share that valued its FTSE 250 rival at £3.3bn.

Direct Line had argued that it could turn its performance around, after slumping in recent years. It rejected the first offer, saying it substantially undervalued the company.

The latest offer is a 73% premium to the closing price before the first bid was announced, the companies said in a joint stock market statement on Friday morning. The companies said:

The Direct Line board believes that, in addition to the attractive headline value per share, the combination would provide the opportunity to deliver significant synergies, creating substantial additional value for both sets of shareholders.

Aviva has until 5pm on – ah – Christmas day to make a firm offer or walk away.

Another Thames Water bidder emerges

French utility Suez could reportedly be brought in to manage the struggling Thames Water as part of a new £5bn bid by an infrastructure investor.

Covalis Capital has submitted a bid to Thames Water, the Financial Times reported, as it looks for new owners and tries to agree an emergency debt package to avoid temporary nationalisation.

Thames Water provides water and sewage services to 16 million customers across London and the Thames Valley in south-east England. It has been on the verge of collapse for several months, labouring under its £19bn debt pile.

The investor plans to break up Thames Water and list the remainder on the stock market, while giving the UK government a seat on the board, according to people cited by the FT. It reported:

Covalis would provide about £1bn up front on agreement of the deal, the people added. The London-based investor would then raise another £4bn from asset sales, refinancing and the listing, which is expected in two to three years’ time.

Under the deal Suez would only function as a service provider. Suez said in a statement:

At this stage, Suez’s scope of work is limited to [an] advisory mission to ensure the project’s success and address the specific challenges faced by Thames Water.

The FT reported that other potential bidders for Thames Water could be Hong Kong-based firm CK Infrastructure Holdings, the owner of Northumbrian Water, and Castle Water, which is owned by Conservative party treasurer Graham Edwards.

The agenda

• 10am GMT: Eurozone GDP growth third estimate (third quarter; previous: 0.2% quarter-on-quarter; consensus: 0.4%)

• 1:30pm GMT: US non-farm payrolls (November; prev.: 12,000 jobs; cons.: 200,000)