UK house prices fall for first time since January as stamp duty cut ends – Business Live | Business
Hello and welcome to our continued coverage of the global economy, financial markets, euro area and business.
UK house prices fell 0.5% in June from May, the first monthly drop since January, according to Halifax, one of the UK’s largest mortgage lenders. The annual growth rate fell to 8.8% from May’s 14-year high of 9.6% as the stamp duty holiday is phased out until September.
The tax cut was introduced by Chancellor Rishi Sunak in June last year to revive the housing market, which effectively shut down in the first two months of the pandemic.
The average price of a property was £ 26,358 in June. Average prices are still more than £ 21,000 higher than the same period last year, after nearly a year of sharp increases.
Russell Galley, CEO of Halifax, says:
With the phasing out of the stamp duty, it has been predicted that the market may start to run out of steam in the second half of the year, and those whose mortgages have been approved in the past are unlikely. first months of summer should benefit from the maximum tax. pause, given the time required to complete transactions.
That said, with the phased approach, those who buy at the current average price of £ 260,358 would still only pay around £ 500 in stamp duty at today’s rates, rising to around £ 3,000 when the going comes back. to normal from early October.
Buyers are particularly looking for isolated family homes, amid an exodus from towns to small towns and rural areas as many people have shifted to working from home during the pandemic. Galley says:
Government support measures over the past year have helped boost demand, especially among buyers looking for larger family homes at the top of the market. Indeed, the average price of a detached house has risen faster than any other type of property over the past 12 months, up more than 10% or almost £ 47,000 in terms of cash. At a cost of over half a million pounds, they now cost £ 200,000 more than the typical semi-detached house.
In Germany, industrial production Unexpectedly, it fell 0.3% in May from the previous month, according to the Federal Statistical Office (Destatis). Production jumped 17.3% from May last year, when large parts of the industry cut production due to the coronavirus pandemic.
Compared with February 2020, the month before the Covid-19 restrictions were imposed, production in May was 5% lower.
Carsten Brzeski, Global Head of Macro at ING, says:
Disappointing and sluggish industrial production in the first two months of the second quarter suggests that supply chain disruptions, such as the Suez Canal blockage in April or persistent semiconductor delivery issues, have failed. left German industry unscathed.
The general direction of industrial production, however, is still on the rise… The rebound will come, it just does not follow the German principle of “Pünktlichkeit”.
In the markets, investors expect report of the last meeting of the US Federal Reserve, tonight, which could show a shift towards a tightening of the policy. Asian stock markets slipped, also under pressure from China’s crackdown on tech companies. Japan’s Nikkei fell 1.1% and Hong Kong’s Hang Seng fell 0.89% to near six-month lows while the Australian market was up 0.9%.
European equity futures point to a slightly higher open here.
The minutes of the June Fed meeting will be reviewed for any signs of how serious members were about cutting the massive asset purchase program and when the first rate hike. of interest could arise.
- 7.45 a.m. BST: trade from France for May
- 9am BST: Retail sales in Italy for May
- 12 p.m. BST: US MBA mortgage applications for the week of July 2
- 7 p.m. BST: report of the US Federal Open Market Committee (FOMC)