UK Housing Market Shows Signs of Recovery; FTSE Shares and Oil Prices React

UK Housing Market Bounces Back Slightly

According to new figures from Lloyds, UK house prices experienced their first increase in four months, rising 0.2% month-on-month in June. The average home now costs £299,330 compared to the previous month's price of £298,812. Annual growth is at 0.6%, up slightly from May’s rate of 0.5%. Scotland stands out with an annual increase of 3.9%, making it a clear outlier.

FTSE Performance Reflects Sectoral Movements

The FTSE All-Share had mixed performances today, driven by company-specific updates. Keller Group was the standout performer, seeing its shares rise 18% following an optimistic trading update. The chemicals company Victrex is a close second, with its shares up 17% after it told investors that its aerospace and electronics division was keeping up growth.

Conversely, Capita saw a significant fall of 16%, largely due to delays in administering the civil service pension scheme. Shell's shares increased by 2.5% after announcing it would sell its fuel supply business in South Africa for $1 billion. The sale is expected to boost Adnoc Distribution’s earnings per share by 6% in the first full year, with the deal covering 580 service stations and other operations.

Oil Prices Surge Amidst Shipping Incident

A sudden spike in oil prices occurred today, with Brent crude up 1.1%, reaching above $72 a barrel. This increase followed an attack on a liquefied natural gas carrier near the Strait of Hormuz. The incident has raised concerns over supply disruptions and geopolitical tensions.

Construction Sector Performance

The UK’s blue chip FTSE 100 index has opened 0.3% higher this morning, boosted by a 2.2% rise in Shell’s shares after the energy company's update today. That puts the UK stock market ahead of Europe, with the Stoxx Europe 600 (which tracks the biggest companies on the continent) down 0.1%. The European index is being dragged down by its tech sector, with the French Soitec – a manufacturer of chip materials – down more than 7% and the worst performing stock in the group.

UK Pub Industry Sees Boost from World Cup

More evidence that the football World Cup is providing a much-needed boost for British pubs: operator Young & Co has said that its like-for-like sales rose nearly 6% in the first 14 weeks of its financial year thanks to good weather, and the World Cup drawing more drinkers to its pubs and gardens. It said revenue was up 9.4% overall for the period between March 31 and July 6, thanks to the newly acquired Cubitt House pubs, and up 5.5% on a like-for-like basis.

Chief executive Simon Dodd noted: 'Our premium, well-invested and differentiated pubs and bedrooms continue to deliver, with Young’s pubs performing strongly in the first quarter. This was supported by favourable weather, a busy summer of sport, with England's success in the World Cup so far a welcome boost, and contributions from our expanded estate, as we integrate the Cubitt House pubs.'

Shell Reports on Gas Trading and South Africa Deal

The oil giant Shell has said that it expects gas trading in its second quarter to be 'significantly' higher than in the first. It did however flag that output is expected to be much lower than in the first quarter due to the impact of the conflict in the Middle East, including the production freeze at its gas-to-liquids facility in Qatar after an attack on the Ras Laffan Industrial City damaged the facility.

Shell expects its integrated gas output in the April-to-June period to be about 610,000 to 650,000 barrels of oil equivalent per day, down around 30% from the 909,000 boed in the first quarter. It previously expected a range of 580,000 to 640,000 boed.

Geopolitical Risks and Oil Prices

The UK’s blue chip FTSE 100 index has opened 0.3% higher this morning, boosted by a 2.2% rise in Shell’s shares after the energy company's update today. That puts the UK stock market ahead of Europe, with the Stoxx Europe 600 (which tracks the biggest companies on the continent) down 0.1%. The European index is being dragged down by its tech sector, with the French Soitec – a manufacturer of chip materials – down more than 7% and the worst performing stock in the group.

House Price Trends Remain Mixed

Bryden adds that for first-time buyers, annual house price growth rose from 0.8% in June to 0.3%. The average first-time property now costs £240,433 according to Lloyds. London remains the most expensive market in the UK, where an average property costs £534,831 – though prices here fell by 1.1% year-on-year in June. The south east was the worst performing region across the UK, with prices down 2% y-o-y.

Scotland was the second strongest behind Northern Ireland, where prices were up 3.9% to an average of £223,277. In Wales, prices were up 0.9% on an annual basis to £231,142. In the north east of England, prices were up 2.8% to an average of £181,133, while the north west recorded a rise of 2.4% to £248,218.

Amanda Bryden, head of mortgages at Lloyds, said: 'Recent price trends continue to reflect wider economic uncertainty, including the impact of global events on inflation and interest rate expectations. While affordability remains stretched for many buyers, mortgage rates have eased from their recent highs, offering some encouragement to those considering a move.'

Summary of Business and Financial Markets

The modest 0.2% month-on-month rise in UK house prices in June represents the first increase in four months, Lloyds has said. In May, prices had slipped by 0.2% compared with the month prior. Bryden adds that for first-time buyers, annual house price growth rose from 0.8% in June to 0.3%. The average first-time property now costs £240,433 according to Lloyds.

London remains the most expensive market in the UK, where an average property costs £534,831 – though prices here fell by 1.1% year-on-year in June. The south east was the worst performing region across the UK, with prices down 2% y-o-y.

Scotland was the second strongest behind Northern Ireland, where prices were up 3.9% to an average of £223,277. In Wales, prices were up 0.9% on an annual basis to £231,142. In the north east of England, prices were up 2.8% to an average of £181,133, while the north west recorded a rise of 2.4% to £248,218.

Source: The Guardian