Closing Post
We must wait until tomorrow morning, at the earliest, to see if the FTSE 100 can storm to a new intraday alltime high (beating its previous record of 8,047 points).
If the pound continues to weaken, and if tensions in the Midde East continue to ease, it’s quite possible.
Until then, here’s today’s main stories:
Bloomberg have calculated that Shell and BP alone accounting for almost half of the 4% rise in the FTSE 100 so far this year.
They add:
AstraZeneca, HSBC Holdings and jet-engine maker Rolls-Royce are also among the main drivers.
George Lagarias, chief economist at Mazars, says the FTSE 100 still has a way to go to catch up to its peers.
“The FTSE 100 hitting it’s all time-highs on Monday is certainly a positive signal for investors who are looking to capitalise on the low valuations of good quality British equities.
To be sure, the index has a long way to climb if it is to catch up to the recent performance of its developed market peers. And more will be required for the LSE to attract foreign listings.”
Britain’s FTSE 250 share index, which contains medium-sized coompanies, had a decent day today too.
The FTSE 250 jumped by 1.07% today, or by 208 points, to 19,599 points, led by Tyman +30%) after the UK door and window handle-maker agreed a takeover offer from a US rival.
The FTSE 250 is seen as a better gauge of the UK economy than the FTSE 100, and it’s notable that it is around 20% off its alltime high, set in 2021.….
Dan Coatsworth, investment analyst at AJ Bell, sums up a historic day on the London stock market:
“While the FTSE 100 failed to hit a new intraday high, it did achieve a new record closing high at 8,023. The strong session, with the UK index up 1.6% on the day, is another reminder that the UK market is not dead in the water.
“The all-time intraday high for the FTSE 100 is 8,047 and today it was just a handful of points away from breaking that level. Driving the market was renewed optimism that Middle East tensions are easing, leading to a buying spree among investors. Sterling weakness also benefited the army of FTSE stocks that earn in US dollars.
“The Bank of England is now expected to start cutting rates before the Federal Reserve sharpens its knife and that’s led to divergent fortunes for the respective currencies.
“Favourite items on the menu to fill portfolios included Marks & Spencer, which was the recipient of a positive broker note from Jefferies telling clients to buy the stock, alongside Next and Sainsbury’s. All three saw their ratings lifted from ‘hold’ to ‘buy’ as part of a review of the broader retail sector.
“The timing of the upgrades was savvy given how attention is shifting to the Bank of England potentially being the trailblazer with rate cuts this summer. That implies consumers could soon be feeling flush if financial pressures ease, and for many there is nothing better than a shopping spree to lift the spirits.
“The key contributors to the FTSE in terms of index points were AstraZeneca, HSBC, Shell and GSK.
“Across the pond, the Nasdaq got off to a wobbly start, quickly losing strength as investors braced themselves for a potentially testing week ahead as the mega-caps start to report quarterly numbers, starting with Tesla tomorrow.”
The weakness of the pound today, as it sagged to a five-month low, was a major factor behind the FTSE 100’s rally to an alltime closing high.
Rachel Winter, partner at Killik & Co, explains:
“The FTSE 100 has just hit a record closing high of 8023. This is largely due to the weakness of sterling versus the dollar.
The FTSE contains a large number of big international companies that earn their revenue in dollars and report their profits in sterling. When the dollar strengthens, these companies become more profitable in sterling terms.
The strength of the dollar is due to sticky inflation in the US, which means that US interest rates will remain higher for longer. Higher US interest rates make dollars more attractive to hold, and so demand for dollars has increased and their price has risen.”
FTSE 100 ends at record closing level
Newsflash: Britain’s blue-chip share index has hit a new alltime closing high.
The FTSE 100 index, which tracks the one hundred largest companies listed in London, has closed at its highest ever level, at 8023.87 points, after jumping by 128 points (+1.62%) today.
That’s above its previous record close of 8,014 points, set in February 2023. But, this still leaves the FTSE 100 slightly below its alltime intraday high of 8,047.06 points, also set in February last year.
Most of the companies on the Footsie rallied today, with retailers among the risers. Marks & Spencer gained 4.4%, Sainsbury rose by 3.9% and Tesco gained 3.4%.
Today’s rally came as geopolitical tensions eased in the financial markets, with investors relieved there were no further clashes between Israel and Iran last weekend.
Hopes of interest rate cuts this year also supported the market, after deputy Bank of England governor Sir Dave Ramsden said last Friday that UK inflation could be lower than expected over the next three years, near the BoE’s target of 2%.
The money markets are now fully pricing a cut to UK interest rates, by August, lowering from from 5.25% to 5%, with two cuts this year expected.
Drum role….. the London stock market has just entered the end-of-day closing auction, so we’ll soon know where the FTSE 100 has ended the day.
Going into the auction, the index was up around 136 points at 8031 points, which would be a record closing high, but not an intraday high.
Just five minutes of trading to go in London… and the FTSE 100’s on track to end at a record closing high….
London’s blue-chip index FTSE 100 remained on track for a new record high 🇬🇧 It's tantalizingly close to surpassing the all-time intraday high of 8,047, and it has been trading above its record closing value of 8,014, recorded in February last year. https://t.co/scGTZAc95G pic.twitter.com/2c2Mah3rRv
— Share_Talk ™ (@Share_Talk) April 22, 2024
Let’s not rule out a record high on the FTSE 100 today, though.
The index is having a late run at the record (8,047 points), and is now up 141 points (+1.75%) back at 8037 points.
That would be a record closing high (but not, quite, an intraday high, which is what really counts).
Susannah Streeter, head of money and markets at Hargreaves Lansdown, says:
“London’s blue-chip index has had a surge of power as heightened geopolitical tensions have eased, and investors assessed the brighter prospects for the UK economy, with interest rate cuts spied on the horizon.
It’s tantalisingly close to breaching the all-time intraday high of 8,047 and it’s been trading above its record closing value of 8,014.
Gold, a safe haven asset, has slipped back slightly in the absence of fresh attacks by Iran or Israel. However, the precious metal is still hovering close to record highs. Brent Crude has also fallen back slightly as the focus turns to the prospects of weakening demand in the US if high interest rates linger for longer. However, it’s not had much effect on the share prices of the big energy giants.
Tensions are still simmering in the Middle East and there are ongoing concerns about the potential that they could flare up again, causing fresh disruption to supplies.
Updated
The gold price has eased away from its recent record highs today, as geopolitical worries ease.
Spot gold is down 2.4% at $2,338 per ounce, down around $52 per ounce today.
Earlier this month it hit a record high of $2,431 per ounce, as investors nervous about inflation or the Middle East crisis bought into gold as a safe haven.
George Khoury, global head of education and research at CFI, explains:
The gold market experienced a strong decline today, as fears surrounding a wider conflict in the Middle East eased, reducing the need for investors to seek safe-haven assets like gold. However, geopolitical concerns could remain an important driving force for gold.
Furthermore, market participants are now keenly awaiting a crucial U.S. inflation reading - the Personal Consumption Expenditures (PCE) price index - due later this week. This data point is expected to provide important cues on the future trajectory of interest rates, which can significantly impact the attractiveness of non-yielding assets like gold. Ahead of this week’s important economic data releases, including the flash global PMIs and the US Advance Q1 GDP report, traders could remain cautious as stronger-than-expected data could drive gold lower.
Updated
Despite the positive start to trading on Wall Street, the FTSE 100 has slipped away from the record high…. it’s now trading around 8027 points.
It’s still a strong day’s trading, with the Footsie up 1.6% or 130 points so far today.
Wall Street opens higher, but Tesla lags
The New York stock market has opened with gains on the main indices.
The Dow Jones industrial average, which tracks 30 large US stocks, is up 167 points at the open at 38,153, +0.44%.
The broader S&P 500 index gained 0.5%, while the tech-focused Nasdaq is 0.7% higher.
But electric car maker Tesla continues to lose ground in the markets. It has dropped by 5% in early trading, after cutting prices late last week in an attempt to drum up sales.
Tesla is due to report its financial results tomorrow, with analysts expecting its worst performance in seven years. Elon Musk has postponed a trip to India, including a planned meeting with the prime minister, Narendra Modi, so he can focus on “very heavy obligations” at the company.
The odds of seeing a new alltime on the London stock market today are narrowing… with the FTSE 100 now touching 8041 points.
Just six points off the record….
The FTSE 100 is inching yet closer to the alltime peak… its now up to 8037 points, +140 today, meaning it’s just 10 points shy of the record.
Nearly every stock on the Footsie is up today.
In the airline sector, workers who refuel aircraft at Heathrow Airport are to strike in a dispute over terms and conditions.
Members of Unite employed by AFS will walk out for 72 hours from 4th May.
The union said AFS, a joint venture between oil and gas companies, was planning to cut pension and sickness benefits.
Heathrow Airport is working on contingencies with AFS to manage any potential disruption, saying it has “robust” measures planned, adding that passengers can book flights from Heathrow with confidence.
Ocado leads FTSE 100 higher
Grocery technology business Ocado are the top riser on the FTSE 100, up 4.3%.
They’re followed by fellow retailers Marks & Spencer (+3.7%) and Sainsbury’s (+3.6%).
Ocado rallied after the Telegraph reported last weekend that it was under pressure from shareholders to consider abandoning the London stock market for New York, where it could get a higher vauation.
This is keeping the FTSE 100 within sight of its record high; its now up to 8,027 points, just 20 points off the peak.
Joshua Mahony, chief market analyst at Scope Markets, says:
The widespread gains seen for the index have seen the retailers and supermarkets come in for particular strength, led by Ocado’s gains as shareholders push for the company to shift their listing over to the US.
The relatively elevated US-valuations have been a key concern for UK businesses, with CEO’s faced with the prospect of either moving their listing or fending off interest from hungry US companies seeking to employ a M&A led growth model
Britain’s index of medium-sized companies, the FTSE 250, is also having a strong day.
The FTSE 100’s smaller sibling is up 1.05% today at 19,594 points.
That’s still a long way from the FTSE 250’s record high of 24,353 points set in September 2021.
Tyman are the top riser, up 30%, after agreeing to be taken over by US building supplies company Quanex in a £788m deal (see earlier post).
The pound is continuing to drop against the US dollar; it’s now down over half a cent today at $1.2317, a new five-month low.
That’s helping to push up the FTSE 100, as it makes the overseas earnings of multinationals more valuable.
The index is now up around 130 points or 1.6% today at 8027 points – just 20 points off the all-time high….
NatWest, Accord, Leeds Building Society and HSBC have announced rate increases today, Sky News reports.
This follows the rise in swap rates – used by lenders to price mortgages – last week, after inflation rates in the UK and the US came in higher than expected in March.
Wall Street is set to open higher when trading begins in New York in under two and a half hours.
That could give stocks in London another lift.
The Dow Jones industrial average, the S&P 500 and the Nasdaq Composite are all on track to rise around 0.5%, according to the futures market.
$SPX: Nasdaq, S&P, Dow futures rise as investor brace for heavy earnings this week
— MasterUp Trading Stocks, Crypto, Forex, Fut, ETF (@Tradinguru55) April 22, 2024
FTSE 100 on track for record close
The FTSE 100 has now climbed over its highest closing level.
The index is trading at 8,015 points right now, slightly above its highest ever close of 8,014 points set in February 2023.
Updated
The GMB union is unimpressed by Thames Water presenting its new business plan that could push up customer bills by 44% - even more than the 40% previously proposed.
Gary Carter, GMB National Officer, says:
“It’s not for hard-up bill payers to dig Thames out of the financial mess they’ve created.
“The shareholders who trouser millions since privatisation must fork out to give the company a chance to turn things round.
“You can’t expect customers to pay £627 a year to pay for the past failures of Thames Water.
“Previous owners have taken the profits in huge dividends rather than putting in the investment needed.”
FTSE 100 nears record high
Back in the City, the FTSE 100 is rallying higher.
It’s now up 111 points or 1.4% at 8007 points, on track for its fourth daily gain in a row – which would be its best run since mid-February.
As covered earlier, shares are being lifted by hopes that the Bank of England will ease interest rates by half a percentage point by the end of this year, with the first rate cut now priced in for August.
The absence of further attacks between Iran and Israel last weekend has also cheered investors, as geopolitical tensions fade.
“The FTSE 100 bounced back strongly on Monday amid relief that tensions in the Middle East seem to have been contained for now,” says AJ Bell investment director Russ Mould, adding:
“Travel and retail stocks were among the gainers on the FTSE 100, with precious metals miner Fresnillo the only stock showing notable weakness, with gold and silver prices dipping as demand for safe havens eased.
The index is now only 40 points off the alltime high set in February 2023:
Updated
Lords urge FCA to halt plan to ‘name and shame’ companies under investigation
Newsflash: The House of Lords Financial Services Regulation Committee is calling on the City regulator to pause its plan to “name and shame” companies under investigation more frequently.
The Committee are asking the Financial Conduct Authority to freeze the plan to announce its enforcement investigations into firms in advance, while it gathers evidence and scrutinises the proposal.
It fears the plan could undermine the overall integrity of the market, and lead to reputations being unfairly tarnished.
Committee chair Lord Forsyth of Drumlean says:
“The FCA’s plan to announce the opening of new enforcement investigations could have a highly negative impact on firms subsequently cleared following a potentially lengthy investigation. Despite having done nothing wrong, those firms, and individuals associated with them, risk having their reputations tarnished. This could also unnecessarily distort the market.
“’Innocent until proven guilty’ is a fundamental principle of our justice system. The committee is presently unconvinced that the FCA has justified departing from this important principle and taking an approach that is at odds with almost all other financial services regulators.
The Financial Times reported last night that government insiders are concerned the FCA’s approach to regulation is harming the City of London and driving business abroad.
FCA faces backlash over plan to ‘name and shame’ companies under investigation https://t.co/3WW6fB6SMp
— Financial Times (@FT) April 21, 2024
First UK interest rate cut priced in for August
The City money markets are brought forward their forecast for the Bank of England’s first interest rate cut to August.
City investors are pricing in a more rapid easing from the BoE this morning, after its deputy governor Sir Dave Ramsden predicted on Friday that UK inflation could be lower than expected over the next few years.
They now expect the first cut in Bank rate, from 5.5% to 5%, in August, rather than September, with a second cut to 4.75% priced in by December.
Last week, the markets briefly indicated the first cut might not come until November, after inflation fell by less than expected in March, to 3.2%.
Ramsden told an audience in Washington DC that he was confident that headline inflation will fall sharply in April, to close to the 2% target, from 3.2% in March.
And significantly, Ramsden also revealed that he believes the “balance of domestic risks” to the UK inflation outlook is more negative than in February, when the Bank predicted inflation would drop this year, but then rise back to 3%.
Now, Ramsden says, it’s “at least as likely” that inflation stays close to the Bank’s 2% target over the next three years.
The oil price has dipped to its lowest level in almost four weeks this morning, as anxiety over Middle East tensions ease.
Brent crude is down 1.5% in early trading today at $85.94 per barrel, the lowest since 27th March.
Last Friday, Brent jumped as high as $90.75 per barrel, before easing back after Tehran downplayed Israel’s missile attack on the Iranian city of Isfahan.
Sigh of relief for Oil importing countries.#Oil prices continue to decline as tensions simmer in Middle East
— Dr. Khaqan Hassan Najeeb (@KhaqanNajeeb) April 22, 2024
Brent lower near $US87 a barrel after losing 3.5 % last week.
Today’s fall means oil is now back to its levels just before Israel attacked an Iranian diplomatic compound in Syria on 1 April, killing 11 people including two senior Iranian generals.
Antonio Ernesto Di Giacomo, market analyst Latam at XS.com, says hopes for a diplomatic resolution and moderation in the region have dampened concerns and contributed to short-term oil price stability.
In conclusion, Iran’s measured response to the alleged Israeli attack in Isfahan has underscored the importance of diplomacy in times of high tension in the Middle East. Although financial markets initially reacted with concern, the retreat in oil prices reflects the hope of avoiding conflict escalation.
However, the situation remains delicate and requires constant monitoring. Stability in the region and the security of the global oil supply largely depends on the ability of the parties involved to stay calm and seek diplomatic solutions to the challenges they face.
Updated
Shares have jumped in London at the start of the new trading week, as geopolitical tensions ease.
Britain’s FTSE 100 share index has gained 93 points, or 1.2%, to 7990 points in early trading, heading closer to its alltime high of 8,047 points.
Shares are recovering amid relief that last weekend passed off without further attacks in the Middle East, after Israel’s missile attack against Iran last Friday.
Investors could also be cheered that the US House of Representatives finally approved more than $61bn worth of military assistance to help Ukraine on Saturday.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, says:
‘’The FTSE 100 has spring in its step at the start of the week, amid an easing of geopolitical tensions.
The pulse of positivity comes in the absence of fresh retaliatory attacks by Israel or Iran and the US flexing its funding muscle and passing a crucial aid package for Ukraine.
Stocks are higher across most of Europe too, with Germany’s DAX up 0.46% and France’s CAC 0.2% higher.
Hornby blames Red Sea disruption for sales drop
Losses at model maker Hornby have widened, after disruption to shipments through the Middle East delayed deliveries of stock and hit sales.
Hornby reported that its underlying loss before tax weakened in the second half of its financial year (the six months to the end of March), while sales only grew by 2%.
In the final quarter, from January to March, sales fell by 8% year-on-year. It blames an early Easter this year, and Red Sea delivery delays which meant some some high value containers didn’t arrive until April.
Hornby’s net debt rose to £14.3m on 31 March, up from £5.5m a year before, which it says is mainly due to the trading loss and capital expenditure.
That is slightly better than the £14.6m reported halfway through the financial year, though.
Red Sea ship attacks have caused a dip in sales for Hornby, the British manufacturer of iconic model railway sets, after deliveries were delayed. https://t.co/A5Yv693dQG
— City A.M. (@CityAM) April 22, 2024
Hornby adds that its remains “cautious” in its outlook, due to “the natural challenges facing a business in turnaround, and the uncertainty of the wider economic and socio-political factors affecting all businesses at this time.”
Full story: Thames Water could raise bills to £627 a year to help fix leaks
Thames Water could raise bills to as much as £627 a year to pay to fix its leaky network, after promising to invest up to £3bn more over the next five years (see earlier post), my colleague Alex Lawson writes.
More here:
CBD vape company Chill Brands shares slide after CEO suspended
The share price of London-listed CBD vape company Chill Brands has slumped 23% after it announced the suspension of its chief executive in connection with an investigation into the use of inside information.
The company is a minnow valued at only £16m before the announcement. It had been under pressure because of proposed ban on disposable vapes in the UK.
Now the company has said that it has asked law firm Fieldfisher to investigate, and that it will work with the City regulator, the Financial Conduct Authority. It is also looking for an interim chief executive.
Chief executive Callum Sommerton has been suspended “in connection with these allegations”, the company said, adding:
This suspension does not constitute disciplinary action or a disciplinary penalty and does not imply any assumption that Mr Sommerton is guilty of any misconduct or that any decision has been made.
Updated
UK asking house prices rise: what the experts say
Estate agents and lenders are reporting that the housing market picked up this spring, following Rightmove’s data showed average asking prices are near their highest level. But there’s not universal agreement….
Tomer Aboody, director of property lender MT Finance, attributes this to stability in the mortgage markets:
“With a pick up in sales providing further confidence in the market, we are seeing the fruits of a stable interest rate environment, combined with reduced inflation, all contributing to an increase in asking prices.
“With the announcement that the government may be looking to introduce another stamp duty restructure in the autumn ahead of the general election, this will provide a further boost for the housing market, saving buyers thousands of pounds.”
Marc von Grundherr, director of Benham and Reeves, says easing cost of living pressures are helping the market:
“Spring has sprung in housing market terms with growing buyer demand pushing sellers to increase asking prices to near record levels.
As the rate of inflation slows and market uncertainty subsides, the property market is responding, as it always does, with upward price movements.
What’s more, wage growth is now outstripping both consumer inflation and house price growth, ensuring that for the first time in years, house price affordability is actually improving.”
While north London estate agent Jeremy Leaf reports that some buyers are still haggling on prices…
“The market continues to play catch-up as the increase in new enquiries is emboldening sellers, not only to make their properties available, but chance their arm at higher asking figures.
“The prospect of more stable or even falling mortgage rates is certainly helping to improve confidence generally.
“However, the uplift in supply has meant more choice so the market remains price sensitive and buyers are negotiating hard, particularly those who require little or no finance.”
However, Charlie Lamdin of Bestagent argues that the asking price data is distorted by more people listing expensive properties, and that “actual house prices are mostly falling”.
Brace yourself for a raft of headlines on “house prices rising” on the back of reporters either wilfully or ignorantly misinterpreting Rightmove’s newest unhelpful and misleading average asking price index.
— Moving Home with Charlie (@moving_charlie) April 22, 2024
The average of new asking prices is higher because more people are… pic.twitter.com/jraI0BLYsm
This incorrect wording implies that sellers are raising their asking prices.
— Moving Home with Charlie (@moving_charlie) April 22, 2024
The actual situation: more people are putting expensive higher end properties up for sale which makes the average figure bigger.
Asking prices are being cut. Not raised.
The struggle against this… https://t.co/OyFLC2t5UL
Updated
Another UK firm falls to overseas takeover
The London Stock Exchange’s mid-sized FTSE 250 index is due to lose one of its manufacturing members to a US takeover.
Tyman, a member of the FTSE 250 that makes door and window components, will be bought by a US rival Quanex in a £788m cash and shares deal, the two companies annoucned this morning.
The takeover is a 35% premium to Tyman’s share price at the close of trading on Friday. Tyman’s board recommended shareholders accept the Quanex offer.
Nicky Hartery, chair of Tyman, said:
In the context of a rapidly evolving North American marketplace, our board ultimately determined that this transaction is the best path to maximising value for Tyman shareholders, who will be able to realise a meaningful portion of their holding in cash at a significant premium to the prevailing share price while also participating in the future upside of the enlarged group.
The 400p per share offer may be a premium to Tyman’s closing price, but it is also short of the prices reached as recently as July 2022.
Yet another takeover by a US rival will do nothing to assuage concerns about the gradual whittling down of the UK’s listed companies. One concern has been that UK companies are relatively undervalued compared to US rivals. That makes it easier for US companies to get a good deal when mounting takeovers.
Thames Water pushes up spending promise by £1.1bn
Troubled water company Thames has this morning outlined plans to increase spending on its network to tackle leaks and sewage spills by at least £1.1bn.
Thames, which is fighting to avoid temporary nationalisation, has submitted an update to its business plan for 2025-2030, under which it would spend £19.8bn to address environmental concerns over sewage dumping, guarantee high quality drinking water and ensure the security of water supplies.
It had previously proposed spending £18.7bn on its network, under a plan that would lift customer bills by 40% to an average of £608 by 2030.
This extra £1.1bn will not lead to even higher bills, Thames pledges, as it will rebalance “operating and capital expenditures”.
BUT, it is also proposing a further £1.9bn of potential investment – if the regulator approves, this would add an extra £19 to bills, taking the average to £627.
Chris Weston, CEO of Thames Water, said:
“Our business plan focuses on our customers’ priorities. As part of the usual ongoing discussions relating to PR24 [Thames’s business plan], we’ve now updated it to deliver more projects that will benefit the environment.
We will continue to discuss this with our regulators and stakeholders.”
The Guardian reported last week that government plans were being drawn up for the renationalisation of Thames Water, under which most of its £15.6bn debt would be added to the public purse.
Its parent company defaulted on a debt at the start of this month, raising the prospect that the company could face a significant restructure or even ultimately collapse.
Introduction: UK house asking prices edge closer to record peak
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The asking price for UK homes is creeping closer to a record high, as demand for larger, more expensive houses picks up.
New data from Rightmove this morning shows that the average price of property coming to the market rose by 1.1% (+£4,207) this month to £372,324. That’s just £570 short of the record set in May 2023.
But “Top of the ladder” properties saw the biggest jump in asking prices in the last month (from 10th March – 13th April 2024). They rose by 2.7%, while the price tag on smaller properties more suited to first-time buyers only rose 0.3%.
Rightmove reports that the number of sales agreed so far this year is 13% higher than at this stage in 2023, as activity rebounds from last year’s much more subdued Spring.
Activity picked up at the end of last month; Thursday 28th March was the busiest day for new homes coming onto the market this year, and the third busiest since August 2020.
Rightmove suspects there is currently a “window of opportunity” for those considering a move to act, before a busy summer of sporting events (including the Olympics and Euro 2024) and the looming general distract movers.
Rightmove’s Tim Bannister says:
The top-of-the-ladder sector continues to drive pricing activity at the start of the year, with movers in this sector typically less sensitive to higher mortgage rates, and more equity rich, contributing to their ability to move.
While some buyers, across all sectors, will feel that their affordability has improved compared to last year due to wage growth and stable house prices, others will be more impacted by cost-of-living challenges and stickier than expected high mortgage rates.
Asking prices aren’t the same as actual selling prices, of course; Halifax reported earlier this month that house prices dipped in March for the first time this year.
Estate agents have warned that sellers who overprice their properties will struggle to find buyers, and end up cutting asking prices to get a deal.
Sellers of larger homes who waited out 2023 price drops & pinned hopes on rates being trimmed in time for their 2024 gardens to bloom, are coming out with renewed confidence of securing a buyer this time round. Driving up, the overall avg growth in asking prices, AKA optimism, by… pic.twitter.com/VYQzwaGv95
— Emma Fildes (@emmafildes) April 22, 2024
The Royal Institution of Chartered Surveyors (Rics) reported this month that demand continued to “recover gradually”, after being hit by the surge in mortgage costs last year.
Uncertainty over the path of UK interest rates could still weigh on the market this year, with the Bank of England currently expected to only cut rates twice by the end of 2024, to 4.75%.
Tom Bill, head of UK residential research at Knight Frank, says:
“Buyers and sellers have faced mixed messages in 2024 as interest rate predictions have fluctuated. While rising asking prices show seller expectations have improved, there is broader downwards pressure on prices as mortgage rates edge higher, supply increases and a wave of people roll off sub-2% fixed-rate mortgages agreed in early 2022.
The result is more friction around prices, particularly when a rate cut seems to move further into the distance with every release of economic data. That said, higher supply means there should be a recognisable spring bounce in the housing market.”
The agenda
9.30am BST: Nathanaël Benjamin, executive director for Financial Stability Strategy & Risk at the Bank of England, speaks at a Bloomberg event
11am BST: CBI industrial trends survey of UK factry sector
1.30pm BST: The Chicago Fed National Activity Index for March
3pm BST: Eurozone consumer confdence stats
4.30pm BST: ECB president Christine Lagarde gives a lecture at Yale University
Updated
