Proportion of price-cut homes for sale ‘highest in over a decade’

Published

2 years ago

September 17, 2023

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More than a third of homes for sale have had at least one price cut – the highest proportion recorded in more than a decade, according to a leading property website.

The average size of the reduction is also the largest since January 2011 at 6.2%, said Rightmove.

When applied to the average asking price, at £366,281 in September, this equates to a typical cut of £22,709.

The property portal said the figures suggested some sellers were too optimistic about their initial asking prices and have had to make some bigger-than-usual adjustments.

It comes on the back of a slump in the housing market following 14 consecutive Bank of England interest rate rises, in a bid to curb soaring inflation.

This has acted to push up the cost of borrowing, including for mortgages.

And a further hike, although possibly the last, is being forecast this week.

In a recent poll of 65 economists, all but one predicted the central bank would raise the rate to 5.5% on Thursday from 5.25%, which would mark its highest level since 2007.

However, Rightmove said there are signs of activity in the housing market starting to pick up, with the number of new properties coming to market jumping by 12% in the first week of September, compared with the average weekly volume in August.

Rightmove’s Tim Bannister said: “It’s been a slower-than-usual August, so all eyes will be on market activity over the next few weeks, which will set the trend for the rest of the year.

“The combination of 14 consecutive Bank of England interest rate rises and many buyers and sellers still catching up on lost pandemic holidays has contributed to a bigger-than-expected summer lull, though we still anticipate an autumn bounce.”

Mr Bannister added: “Plenty of sales are being agreed for properties that are priced at the right level, and those that are selling are still taking five days less than at this time in 2019.

“We’re also seeing the number of fall-throughs decline as market conditions and mortgage rates stabilise.”

Andy McHugo, director at McHugo Homes in Birmingham, said: “In almost 20 years of selling homes, I feel that this summer and last summer have been the most subdued, perhaps due to the impact of not being able to travel in the summers of 2020 and 2021, but obviously with the current economic backdrop also.

“Encouragingly, since the start of September we’ve seen an upturn in inquiries as more homeowners have been motivated to step out into the market place, which should help translate into sales over the coming weeks and months.”

If the base rate does peak this week at 5.5% from a starting point of 0.1%, it would rank among the biggest of the so-called tightening cycles of the last 100 years, only coming behind surges that took place in the late 1980s and in the early and late 1970s.

Recession accompanied all of those prior sharp increases in rates and a downturn will feature increasingly in the minds of the Bank’s monetary policy committee, with the 14 rate hikes it has already made yet to fully feed through into the real economy.

Data between now and Thursday’s announcement could yet influence the outcome, with inflation figures for August due on Wednesday likely to buck the falling trend thanks to rising petrol prices.

While the rate of price rises has gradually been coming down from its peak of 11.1% last October – to 6.8% in the year to July – it remains high.

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Energy bills set for series of falls as price cap due to be lowered, says forecaster

Published

1 hour ago

May 19, 2025

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Energy bills set for series of falls as price cap due to be lowered, says forecaster

Energy bills are set to fall from this July and will continue to drop in the autumn and winter, a forecaster has said.

Households will be charged £129 less for a typical annual bill from July as the energy price cap is due to fall, according to energy consultants Cornwall Insight.

From July, an average dual fuel bill will be £1,720 a year, 7% below the current price cap of £1,849 a year.

The price cap limits the cost per unit of energy and is revised every three months by the energy regulator Ofgem.

The official announcement from Ofgem will be made on Friday.

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Bills had already been made more expensive for three three-month periods, or quarters, in a row, in October, January, and April, as wholesale gas prices rose and European stores of the fossil fuel were depleted due to cold weather.

Electricity prices are tied to gas prices.

The UK is also heavily reliant on gas for home heating and uses a significant amount for electricity generation.

Drops when the cap is next changed in October and January will be “modest”, Cornwall Insight said.

Price falls are not a certainty, however, as weather patterns, gas storage rules, the war in Ukraine, and tariffs could all change pricing.

Bills still high since Ukraine war

Energy costs have remained elevated following Russia’s full-scale invasion of Ukraine, and bills are still “well above” the levels seen at the start of the decade, said Cornwall Insight’s principal consultant, Dr Craig Lowrey.

“Prices are falling, but not by enough for the numerous households struggling under the weight of a cost-of-living crisis.

“As such, there remains a risk that energy will remain unaffordable for many,” he said.

“If prices can go down, they can bounce back up, especially with the unsettled global economic and political landscape we are experiencing. This is not the moment for complacency.”

The government was called on by Mr Lowrey to explore options such as social tariffs, where vulnerable customers could pay less.

Proposals, including zonal pricing, which would see different regions of the country pay different rates, based on local supply and demand levels, are important but must be balanced with the urgent affordability crisis people are facing now, he said.

The continued growth of domestically produced renewable energy is “a positive step forward” and a cause for optimism as it helps protect against global energy price shocks and improves energy security, Mr Lowrey added.

“That progress needs to continue at pace, not just for the net zero transition, but to help build a more stable and secure energy future for all.”

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UK-EU trade deal: What is in the Brexit reset agreement?

Published

6 hours ago

May 19, 2025

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UK-EU trade deal: What is in the Brexit reset agreement?

The UK and the EU have agreed a new trade deal – five years after Brexit kicked in.

Following six months of talks after Sir Keir Starmer promised a fresh deal when he became prime minister last July, the two sides have come to an agreement.

Here are the details:

eGates

British passport holders will be able to use more eGates in Europe to avoid the long border control queues that have become the norm since Brexit in many EU countries.

Pet travel

Pet passports will be brought back so cats and dogs coming from the UK will no longer need pricey animal health certificates for every trip. After Brexit, pet owners had to get a certificate from a vet in the UK then a vet in the EU before returning.

Red tape on food and drink sales

A new sanitary and phytosanitary (SPS) deal has been agreed to reduce red tape currently needed to import and export food and drink between the UK and the EU.

There is no time limit to this part of the deal, which the government says will reduce the burden on businesses and reduce lorry queues at the border.

The “vast majority” of routine checks and certificates for animal and plant products will be removed completely, including between Great Britain and Northern Ireland.

The government says this could lower food prices and increase choice on supermarket shelves.

Some British foods that have been prevented from being sold in the EU since Brexit will be allowed back in again, including burgers and sausages.

Fishing rights

The current fishing deal agreed in 2020 will continue for 12 years.

There will be no increase in fish quotas.

EU fishing vessels can fish in UK waters, but they require a valid licence, and there are annual negotiations on access and share of stock.

The UK government has announced a £360m investment into the fishing industry to go towards new technology and equipment to modernise the fleet, train the workforce, help revitalise coastal communities, support tourism and boost seafood exports.

Defence

A new security and defence partnership has been agreed so the UK defence industry can participate in the EU’s plan for a £150bn defence fund called Security Action for Europe (SAFE). This will support thousands of British jobs.

The UK and EU will also enhance cooperation over maritime security and accident reporting.

Carbon tax

The deal will see closer co-operation on emissions by the UK and the EU, linking their own emissions trading systems.

The UK’s scheme sets a cap on the total amount of greenhouse gas emissions allowed from the power generation sector, energy-intensive industries and aviation, with companies issued allowances that they can trade with each other.

Under the deal, UK businesses will avoid being hit by the EU’s carbon tax, due to come in next year, which would have handed £800m to the EU.

Steel

British steel exports will be protected from new EU rules and tariffs to save UK steel £25m a year.

Further talks:

Youth mobility scheme

The UK and the EU have agreed to more negotiations on a youth mobility scheme to allow people aged 18-30 in the UK and the EU to move freely between countries for a limited period.

The scheme would include visas for young people working, studying, volunteering, travelling and working as au pairs.

Erasmus

The EU and the UK have agreed they should work towards an Erasmus programme, the student exchange programme which was scrapped when Brexit took place.

Catching criminals

The two sides have agreed to enter talks about the UK having access to EU facial images data to help catch dangerous criminals.

Migration

The two sides have agreed to further work on finding solutions to tackle illegal migration, including on returns and a joint commitment to tackle Channel crossings.

Electricity

The UK and the EU said they should explore the UK’s participation in the EU’s internal electricity market, including in its trading platforms.

Business

Ryanair raises fares after profits hit by lower ticket prices

Published

7 hours ago

May 19, 2025

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Ryanair raises fares after profits hit by lower ticket prices

Europe’s largest airline has seen annual earnings drop by 16% after cutting air fares – but revealed a price hike as it seeks to return to growth.

Ryanair reported profits after tax fell to €1.61bn (£1.35bn) for the year to 31 March, down from €1.92bn (£1.61bn) in 2024, still the second highest on record.

On average, plane tickets were 7% cheaper during this period than the 12 months before, it said.

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There had been a 21% rise in fares in the year up to March 2024, which bosses had signalled was due to end.

Higher-for-longer interest rates and inflation in the first half of the year meant ticket prices had to come down, the budget carrier said.

But fares are already back on the rise, Ryanair’s chief executive Michael O’Leary said.

The airline “cautiously” expects to recover “most, but not all” of the fare decline, which he said will boost profits.

Demand for summer flights is “strong”, Mr O’Leary said, with peak fares “modestly” ahead of last year.

In recent months, that rebound has already been under way. Fares since April are on track to be “a mid-high teen per cent ahead” by the end of next month, compared with the same period last year.

That trend is expected to continue to July, August and September, Mr O’Leary said.

“While we cautiously expect to recover most, but not all of last year’s 7% fare decline, which should lead to reasonable net profit growth in 2025-26, it is far too early to provide any meaningful guidance,” he said.

“The final 2025-26 outcome remains heavily exposed to adverse external developments, including the risk of tariff wars, macro-economic shocks, conflict escalation in Ukraine and the Middle East and European air traffic control mismanagement/short staffing.”

Read more from Sky News:
UK and EU agree ‘Brexit reset’ trade deal

Passenger numbers grew to a record 200 million on the back of cheaper fares, hitting a target that had been reduced due to delays in delivering new Boeing planes.

The US manufacturer has struggled with increased regulatory oversight after a door panel blew off an Alaska Airlines plane mid-flight in January last year. Strike action by staff had added to the delays.

The forecast for passenger numbers has been reduced again. Ryanair now aims to transport 206 million passengers in this financial year.

It hopes to reach 300 million passengers by 2034 and on Monday said it still expects to receive 300 new Boeing planes by 2033.