Asking prices for UK homes near record high; Thames Water lifts spending plan to £19.8bn – business live

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.

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”.

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.

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.

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.

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