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.
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.
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.
Facebook owner Meta pays £149m to surrender lease on London office
Meta has “surrendered” the lease on one of its London offices as tech firms continue efforts to slash costs.
The parent firm of Facebook and Instagram let the space at 1 Triton Square from British Land, the FTSE 250 commercial property company, in 2021 but never moved in.
Meta paid £149m to break the lease, which was understood by analysts at BNP Paribas to have 18 years left to run.
British Land said that despite the payment, the company’s exit would reduce its earnings per share by 0.6% over the six months to next March.
But it said of the development in a trading statement: “Meta’s surrender of our building at 1 Triton Square… enables us to accelerate our plans to reposition Regent’s Place as London’s premier Innovation and Life Sciences campus.”
The decision leaves Meta with three other offices in the UK capital, including one owned by British Land.
Mark Zuckerberg – like bosses at rival firms in the technology space – has cut thousands of jobs to save costs in the tougher global economy.
As things like ad revenues have suffered, companies are under pressure to maintain vast investment budgets for risk of falling behind.
British Land’s trading statement was largely upbeat.
The company, which has two other major property campuses in central London, is also the largest operator of retail parks in the UK.
Its portfolio, which includes Sheffield’s Meadowhall, suffered terribly during the COVID pandemic due to restrictions on movement but it has been acquiring new sites since while clawing back a backlog of missed rents
The property firm has a group occupancy rate of 97% despite the cost of living crisis and parallel cost-of-doing-business crisis.
Chief executive Simon Carter told investors: “I am pleased with the continued momentum in the business.
“Operationally we are seeing strong leasing activity which reflects the exceptional quality of our portfolio and has resulted in our recent upgrade of the expected ERV (estimated rental value) growth in retail parks.”
Ofwat to return customer money as water firms underperformed
Customers will receive £114m off their water bills next year as the regulator has said water companies fell short of standards.
The majority of water and wastewater companies in England and Wales underperformed, Ofwat said as part of its water company performance report.
As a result, all but five of the 17 utility providers will have to give back money to customers. The others can increase prices.
Water firms were classed as leading, average or lagging in categories including pollution incidents, customer service and leakage. No company was ranked as leading.
Seven are categorised as lagging in the 2022-2023 targets: Anglian Water, Dŵr Cymru, Southern Water, Thames Water, Yorkshire Water, Bristol Water and South East Water.
A further ten companies are listed as average.
Companies that have to give back money to customers are:
• Affinity Water
• Anglian Water
• Dŵr Cymru
• Hafren Dyfrdwy
• Northumbrian Water
• SES Water
• South East Water
• South West Water (South West area)
• South West Water (Bristol area)
• Southern Water
• Thames Water
• Yorkshire Water
Firms that have performed sufficiently and can charge more are:
• Portsmouth Water
• Severn Trent Water
• South Staffs Water
• United Utilities
• Wessex Water
The greatest amount, more than £100m, will be paid back to customers of Thames Water, the utility which supplies one in four people in Britain with water.
It’s followed by Dŵr Cymru and Anglian Water who have to return £24m and £23.4m to their bill payers, respectively.
Improvements have been made in areas since 2020, Ofwat said, such as leakage and internal sewer flooding, but progress has been “too slow”. Last year all but one company achieved the performance level for unplanned water outages.
It follows an apology from water and sewage firms in England for “not acting quickly enough” on spills. In May they vowed to spend £10bn to fix the problem.
During the 2022 to 2023 year less than half of water companies met targets on reducing pollution and leakages, Ofwat said on Tuesday.
Over the past year there was also a decline in customer satisfaction, it added.
At the same time, Ofwat said, companies had not fully invested service enhancement funding.
While it’s good news for bill payers, the regulator said it is not good news overall.
“It is very disappointing news for all who want to see the sector do better”, Ofwat chief executive, David Black said.
“It is not going to be easy for companies to regain public trust, but they have to start with better service for customers and the environment.”
Thames Water pleaded guilty to four charges related to illegally discharging waste and in July was fined more than £3m for polluting rivers.
Workplace absences ‘at 10-year high’ with stress the major cause of long-term sickness
Workplace absences have hit their highest level in over a decade, according to a report which is urging employers to take health more seriously if they want to retain staff.
The Chartered Institute for Personnel and Development (CIPD) said that analysis of data from over 900 companies employing 6.5 million staff found an average 7.8 absence days per employee over the past year.
That was up a whole two days per person compared to pre-pandemic levels.
While minor illnesses were the main factor behind short-term absences, stress was also high on the list – with work-related and cost of living pressures among the reasons.
The report said 76% of respondents had been off work due to stress over the past year, adding that it was also a top cause of longer-term absences.
Mental health was blamed for 63% of long-term absences.
The human resources body said just over a third of organisations had reported that COVID-19 remained a significant cause of short-term absence.
The findings chime with official figures showing long-term sickness running at a record rate.
The Office for National Statistics (ONS) said earlier this month that more than 2.6 million people do not have jobs due to their health.
It reported that the list had grown by 464,225 over the three months from April to June, compared to the same period last year.
At the same time, a report on the issue by the Institute for Public Policy Research (IPPR) described the growing numbers as a “serious fiscal threat” to the UK.
The think tank said long NHS waiting lists were a contributing factor – in the cost to the taxpayer as well as people’s declining health.
The absence report, supported by health plan provider Simplyhealth, showed that a variety of workplace support schemes were on the rise but many lacked flexible working options and health services.
The study’s authors suggested it was vital that companies, many desperate to retain staff amid current labour shortages, raise their game.
Rachel Suff, senior employee wellbeing adviser at the CIPD, said: “External factors like the COVID-19 pandemic and the cost-of-living crisis have had profound impacts on many people’s wellbeing.
“It’s good to see that slightly more organisations are approaching health and wellbeing through a stand-alone strategy.
“However, we need a more systematic and preventative approach to workplace health.
“This means managing the main risks to people’s health from work to prevent stress as well as early intervention to prevent health issues from escalating where possible.”
Claudia Nicholls, chief customer officer at Simplyhealth said: “With record numbers of people off sick, employers have a vital role to play in supporting them through workplace health and wellbeing services.
“They can have a positive impact on the economy and ease pressure on the NHS.
“Despite an increasing number of workplace health and wellbeing services being put in place, employees are experiencing increasing mental health issues and the highest rate of sickness absence in a decade.
“However, focusing on fixing sickness alone is unlikely to uncover areas where any significant improvements can be made; companies need to implement preventative health and wellbeing strategies that are supported by the most senior levels of leadership and build line manager skills and confidence to support wellbeing.”
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