UK house asking prices in largest November fall since 2018 – business live

Wholesale gas prices have fallen today, after Chevron restored production at the Tamar offshore gasfield off the coast of Israel.

Chevron turned the taps back on after being told by Israel’s Energy Ministry to resume production, with production expected to reach full capacity within a few days.

The move comes a month after Chevron was instructed to shut the field, after Hamas’s attack on Israel on 7 October.

The day-ahead UK gas price has dropped by 9% this morning, to 94.5p per therm. The month-ahead price is 2.8% lower.

European gas prices are also weaker, with the benchmark month-ahead price down 2.5%.

Gas prices rose last month, early in the Israel-Hamas war, but had dipped back more recently.

London’s stock market has opened higher, as investors cling onto hopes that global interest rates may have peaked.

The FTSE 100 index has gained 52 points, or 0.7%, to 7412 points, recovering more than half of Friday’s losses.

Pensions and retirement services firm Phoenix Group is the top riser, up almost 7%, after upgrading its guidance for cash generation this year.

Engineering firms Melrose (+2.5%) and Rolls-Royce (+2.4%) are also in the top risers.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, says:

‘’The FTSE 100 has found a dose of Monday motivation amid hopes that peak interest rates have been reached, despite warnings about America’s huge debt pile and ongoing geo-political fracture.

British Land has helped cement a more upbeat mood, helped by the performance of its retail parks portfolio, with shares rising 5% in early trade.

Results appear to have spread wider cheer about the resilience of the UK economy, with the company expecting rents for commercial property to rise next year.

Traders are shrugging off the news, on Friday night, that credit ratings agency Moody’s has cut its outlook on the US government from stable to negative.

The rising geopolitical tensions gripping the world continue to be good business for BAE Systems.

The UK weapons manufacturer has tol shareholders that it has booked £30bn of sales so far in 2023.

That includes £10bn in the second half of the year, with BAE winning £3.9bn of funding for the next phase of the UK’s next-generation nuclear-powered attack submarine programme, known as SSN-AUKUS.

BAE, which lifted its forecasts in August, are sticking with that improved outlook – including sales growth of 5% to 7%, and underlying earnings up 6%-8%.

Charles Woodburn, chief executive of BAE Systems, says:

“Trading has been in line with the upgraded guidance we issued at the time of our 2023 half-year results. We are delivering another year of good sales and earnings growth, together with strong cash flow generation.

“Order flow on new and existing programmes, renewals on incumbent positions and progress with our opportunity pipeline remains strong. These underpin our confidence and visibility for good top line growth in the coming years, and we continue to reinforce our value compounding model with a sharp focus on operational performance and disciplined capital allocation.”

Royal Mail fined £5.6m by UK regulator for missing delivery targets

Jasper Jolly

Royal Mail has been fined £5.6m by the regulator for missing its first- and second-class delivery targets.

Ofcom said Royal Mail missed the targets by a “significant and unexplained margin”, causing “considerable harm” to its customers.

TThe company delivered more than a quarter of first-class post late, with only 74% arriving on time in the 2022-23 financial year, far below its statutory target of 93%.

It also missed its second-class target, delivering 91% on time compared with a target of 98.5%, and its postal workers completed 89% of delivery routes for each required day, a far cry from the 99.9% expectation.

Ian Strawhorne, Ofcom director of enforcement, said Royal Mail cannot use the Covid-19 pandemic as an excuse any more, adding:

“The company’s let consumers down, and today’s fine should act as a wake-up call – it must take its responsibilities more seriously. We’ll continue to hold Royal Mail to account to make sure it improves service levels.”

IDS says it is “very disappointed” with its quality of service performance in 2022-23, and acknowledges Ofcom’s decision today.

More here:

Worryingly, business confidence in the UK has fallen to its lowest level this year, even though inflation expectations have eased.

The latest quarterly UK Business Outlook from Accenture and S&P Global has found that the net balance of firms expecting activity to increase over the next 12 months slid to +37% in October, down from +40% in June and +43% in February.

The survey found that firms expect cost inflation to slow, meaning they will raise prices less steeply. But wage growth expectations remain near record levels, as staff push for protection against rising prices in the shops.

Higher interest rates are weighing on investment plans too, with slightly more firms expecting to cut R&D expenditure in the upcoming year than to raise it.

But UK firms are still cheerier than international rivals.

The report says:

Despite the fall in confidence, UK business optimism still remained relatively high compared to global (+25%) and European (+16%) average, which fell by 3% and 9% respectively.

Tom Bill, head of UK residential research at Knight Frank, points out that weak suppy of houses has stopped prices crashing this year:

“Sales volumes will improve as buyers get used to higher rates and sellers become accustomed to lower asking prices.

The story of this slowdown is a double-digit fall in transactions rather than a dramatic price correction, which has been kept in check by weak supply. Unlike the pandemic or mini-Budget, there is no single reason that activity is weak.

Higher rates, the prospect of a general election, overseas conflict and ambiguity over when the bank rate will peak are all sapping sentiment. We expect prices and sales volumes to bottom out next year as the economic backdrop stabilises.”

Matt Thompson, head of sales at Chestertons, suggests the downturn in the capital could be bottoming out:

In London, many house hunters don’t expect property values to fall much further; particularly as prices haven’t decreased to the extent as initially predicted by some.

As a result, buyers are currently more motivated to continue their property search. This boost in buyer confidence is further supported by last month’s announcement that interest rates remain at 5.25% for the time being.”

Victoria Scholar, head of investment at interactive investor, says:

With prices coming down and expectations for further weakness in the housing market next year, this is very much a buyers’ market, particularly for individuals and families who don’t need to load up on debt. But many of those who need a mortgage have been spooked by the surge in borrowing rates, holding off until next year, hoping that borrowing rates will ease and mortgage affordability improves.

Plus sellers are less incentivised to list their properties at the moment given that they would most likely need to drop their asking prices.

On a more positive note, Rightmove said that the housing shortage is easing. And with the Bank of England keeping rates on hold at its two most recent decision meetings, there are expectations that with inflation coming down, the mortgage market could be shifting beyond its peak. In an optimistic sign, just last week Nationwide dropped its two-year fixed mortgage rate below 5% in what it called a ‘watershed moment’ for the housing market.”

Landlords sell up in Great Britain as buy-to-let market sours

Miles Brignall

The great property sell-off by landlords has continued across Great Britain this year, in particular in Scotland, where the buy-to-let bubble appears to have burst.

Estate agent Hamptons revealed that landlords were on target to have bought the fewest number of homes since 2010 – once the period of the first Covid lockdown is discounted from the data.

The upmarket estate agent said that while the 2023 sell-off had been less pronounced than over the last two years, it was continuing the trend started in 2021.

More here.

Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets.

The chill in the UK housing market isn’t letting up, as high interest rates continue to cool demand from buyers.

Asking prices for homes in Britain have fallen at their fastest pace in five years for the time of year, according to property website Rightmove this morning.

New seller asking prices dropped by 1.7%, or over £6,000, this month to an average of £362,143, Rightmove reported.

It’s common for asking prices to slip as Christmas approaches, as sellers price their homes more competitively to attract buyers.

But this month’s fall is the largest November drop since 2018, although they did drop by more in August and also last December.

Rightmove says 2023 has been challenging for the housing market, but more positive than predicted.

Its data shows that average asking prices are just 3% below May’s peak, while the number of sales being agreed has picked up in the last month, and more stock available than at the peak of the Covid-19 pandemic.

Tim Bannister, Rightmove’s director of property science, says:

Despite the turbulent end to 2022, the year to date has been better than many expected. Asking prices have eased from the unsustainably frothy heights seen during the pandemic markets, where many sales went to best and final bids.

However, new seller asking prices are now just 3% behind May’s peak and this relatively small fall in asking prices, coupled with stable numbers of new properties coming to the market each month, are strong indicators that forced sales are not widespread.

The number of sales being agreed is now 10% below the same period in 2019, improving from being 15% below 2019’s level last month. The pandemic-driven stock shortage also now appears to be over, with the number of available homes for sale now just 1% behind this time in 2019.

While there is certainly no glut of homes for sale, buyers across Great Britain are likely to see much more choice in their local area compared to a year ago.

The agenda

• 8.15am GMT: ECB vice-president Luis de Guindos speaks at the Opening Conference of the Euro Finance Week “The Future of Banking”

• 12pm GMT: Opec’s monthly oil market report

• 12pm GMT: India’s inflation rate for October

• 3pm GMT: IBD/TIPP index of US economic optimism

• 4.05pm GMT: Bank of England poliicymaker Catherine L Mann speaks at the University of Oxford Environmental Economics Seminar ‘Climate and monetary policy. In particular on transition policies and their macroeconomic effects and monetary policy’