UK house prices ‘stable in January’; anger as BP profits soar to record –

 

UK house prices ‘stable in January’; anger as BP profits soar to record – business live

British house prices were unchanged in January, Halifax reports, but annual growth slowed to a three-year low of 1.9%

https://www.theguardian.com/business/live/2023/feb/07/uk-house-prices-january-bp-profits-soar-banking-ftse-stock-markets-business-live

 

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Introduction: Halifax reports UK house prices stable in January

An estate agents in Windsor, as Halifax reports that the start of 2023 has brought some stability to UK house prices

An estate agents in Windsor, as Halifax reports that the start of 2023 has brought some stability to UK house prices Photograph: Maureen McLean/REX/Shutterstock

Graeme Wearden

Tue 7 Feb 2023 10.19 GMT

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UK

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BP

10.19 GMT

HSBC has cut the rate on one of its five-year UK fixed-rate mortgages to below 4%, as the market continues to calm down following turmoil in the autumn.

 

HSBC UK has reduced a five-year fixed-rate mortgage deal for borrowers with a 40% deposit to 3.99%. The deal has a £999 fee.

 

It is the first time since September 2022 that a five-year fixed-rate mortgage has been offered by HSBC at a rate below 4%, PA Media reports, adding:

 

It is only available to homeowners who are remortgaging or those who are switching rates (existing customers rolling off an old deal and on to a new one with HSBC).

 

The move is part of a wider range of mortgage rate cuts made by HSBC UK on Tuesday.

 

The average interest rate on five-year, and two-year, fixed-rate mortgages surged over 6% last autumn after the mini-budget caused chaos in the bond market, driving up the yield on UK gilts. Rates have been dropping since, as the financial markets cut their forecasts for how high UK interest rates will peak.

 

20m ago

10.04 GMT

Common Wealth, the think tank, have calculated that BP spent 14 times as much on shareholder payouts over the last year as on capital expenditure on its ‘low carbon’ segment.

 

Mathew Lawrence, director at Common Wealth, says this – and the plan to invest more in oil and gas - shows the need to reorganise the energy system:

 

“The pivot back toward oil and gas - and the prioritisation of shareholders over renewable investment - confirms a critical lesson: the for-profit corporation is poorly equipped to deliver the energy transition at the required speed. Its incentives and purpose dangerously misalign with the needs of people and planet.

 

A successful transition will require reckoning with that fact and acting to reorganise our energy system.”

 

Today’s results show that BP spent $1.024bn on capital expenditure on low carbon energy (compared to $3.2bn on gas). In contrast, BP shareholders recieved annual dividends worth $4.3bn during the year, and also BP announced over $11bn of share buybacks (a way of returning cash to shareholders).

 

49m ago

09.35 GMT

BP (+3.5%) is pushing the FTSE 100 back towards the record highs set last Friday.

 

The blue-chip share index has gained 35 points this morning, or 0.45%, to 7871 points. It hit a new alltime high of 7906.58 on Friday afternoon.

 

Russ Mould, investment director at AJ Bell, says:

 

“BP may be enemy number one in the public’s eyes for its record profits, but its latest success has helped to drive up the FTSE 100, which in turn will benefit people up and down the country with exposure to UK stocks in their pension,” says

 

“The UK blue chip index advanced 0.5% to 7,873 with energy companies the key driver, alongside a good showing from banks and pharmaceuticals.

 

This follows losses on Wall Street last night, where the tech-focused Nasdaq fell 1% and the broader S&P 500 dropped 0.6%.

 

Mould explains how the prospect of further interest rate increases are moving the markets, following stronger than expected jobs numbers last Friday in the US.

 

A strengthening labour market theoretically makes it less likely that the Federal Reserve will halt interest rate rises anytime soon.

 

The Fed needs to see both the jobs market and inflation start to cool before it can justify changing its stance on rates.

 

“Over the past month or so, investors have become more optimistic that we’re near the top of the rate rise cycle, hence why you’ve seen higher-risk companies do well on the stock market. If this optimism turns out to be misplaced then we’ll likely see investors flock back to sectors where you can typically find value stocks such as banking, energy and tobacco. In a way, today’s movement on the FTSE 100 already reflects this investor thinking.”

 

1h ago

09.26 GMT

The stabilisation in UK house prices in January may be just a ‘blip’, suggests Mike Scott, chief analyst at estate agency Yopa.

 

Prices may fall again over the next few months. he suggests, although Yopa does expect that house prices will return to growth later this year, though not at the kind of rapid growth rates that we saw from 2020 to 2022.

 

Scott adds:

 

Despite last week’s base rate rise to 4%, mortgage interest rates are now falling as market expectations for further base rate rises are easing off. In addition, average earnings increases may be running behind overall inflation, but they are now well ahead of house price growth, and there is still a serious shortage of homes.

 

All of these factors will drive renewed house price growth once the shock of last autumn’s abrupt interest rises is behind us.

 

1h ago

09.06 GMT

One in five households with prepayment meters have not cashed in their energy vouchers issued to help pay bills.

 

About one in five people did not redeem the £66 energy support voucher they were sent by PayPoint in November, the company has said this morning.

 

PayPoint had sent out hundreds of thousands of vouchers in November under a Government support scheme. But only 81% of those vouchers had been redeemed on Sunday when they ran out – 90 days after they were issued.

 

It means that thousands of households with prepayment meters have missed out on energy bill support that they were entitled to.

 

Back in December, charities and MPs called on ministers to intervene after it emerged that around 1.3m vouchers for homes with prepayment meters had been either lost, delayed or unclaimed.