UK house price gauge falls to lowest since 2009, as banks launch ‘mortgage price war’ – business live

Hopes of a rescue deal for troubled UK budget retailer Wilko are fading today, Sky News reports.

They say Wilco could be heading into insolvency within hours.

Here’s the story:

Sky News has learnt that Wilko’s board is expected to appoint PricewaterhouseCoopers (PwC) as administrator later today after talks with a number of potential rescuers stalled.

The move would exacerbate the risk to 12,000 jobs, which would make the family-owned chain one of the biggest retail casualties for years.

One source described administration on Thursday as “inevitable” barring the sudden emergence of a new rescue plan.

Wilko has until Monday to find new funding, after filing a legal measure protecting it from creditors for 10 days on Thursday.

Yesterday, Wilko stopped offering home deliveries for orders on its website as it holds last-ditch talks on a potential rescue deal.

Kalyeena Makortoff

The owner of Ladbrokes and Coral bookmakers has said it is close to “drawing a line” under a scandal at its former Turkish business, as it set aside £585m to pay a fine over alleged bribery.

Entain has put aside the cash in anticipation of a settlement with UK authorities, who entered into a deferred prosecution agreement with the international betting and gaming group earlier this year.

Entain said on Thursday that negotiations with the UK’s Crown Prosecution Service had now “progressed to a point where the company believes it is likely to be able to agree a resolution” to an investigation by HM Revenue and Customs (HMRC).

Full story: Four of Britain’s biggest lenders cut rates on fixed mortgage deals

Rupert Jones

Four of Britain’s biggest lenders have cut rates on their fixed mortgage deals, easing some of the pressure on hard-pressed homeowners, my colleague Rupert Jones reports.

Halifax, part of Lloyds Banking Group – the UK’s biggest mortgage lender – is reducing rates by up to 0.71 percentage points from Friday. That means a five-year fixed rate currently priced at 6.10% will be offered at a rate of 5.39%.

It also emerged that average rates on new two- and five-year fixed mortgages have fallen slightly.

Mortgage rates have risen rapidly as the Bank of England has pushed up interest rates in an attempt to tame inflation. Last week the Bank raised interest rates for the 14th consecutive time, bringing the base rate to 5.25%.

Relentlessly increasing housing costs have piled further pressure on Britons already struggling to cope with higher food and energy costs, but the cuts to rates – in some cases for the second time in a fortnight – will provide optimism that those costs may ease.

Britain’s surveyors have also reported the broadest increases in rents since Rics’ series began in 1999.

Demand from tenants to rent a home rose at the fastest pace since early 2022, as rising interest rates made it harder for people to buy a new home.

Those rising borrowing costs are also pushing some landlords out of the market – the number of properties being offered by landlords fell by the most since the early in the pandemic.

Rents are likely to continue rising sharply despite the cost-of-living crisis, surveyors are warning.

RICS chief economist, Simon Rubinsohn, explains:

Demand shows no signs of letting up, supply remains constrained and that means rents are likely to continue rising sharply despite the cost-of-living crisis.”

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Britain’s housing sector continues to weaken, as rising interest rates hit demand for property, the country’s surveyors are warning today.

The Royal Institution of Chartered Surveyors (Rics) has reported the most widespread falls in British house prices since 2009 in the last month.

Tighter lending environment continues to weigh heavily upon homebuyer activity, Rics says.

But there may be relief around the corner, with several major lenders cutting their mortgage rates this week.

The latest survey of Rics members, for July, found that:

• House inquiries and sales continue to decline

• House prices fall for a further month

• Near-term market expectations remain negative

• Rental demand continues to rise along with expected rental prices

Rics’s house price balance, which measures the difference between the percentage of surveyors reporting price rises and falls, dropped to -53 in July from a downwardly revised -48 for June.

That’s a larger fall than expected, and the lowest reading since April 2009,

A net balance of -44% of surveyors reported a decline in agreed sales during July.

That’s down from -36% in June and is the weakest reading for the sales measure since the early stages of the pandemic.

That backs up the message from lenders Nationwide and Halifax in recent months, who have both reported falling prices since their peak last August.

Rics chief economist, Simon Rubinsohn, warns that demand is weakening:

“The recent uptick in mortgage activity looks likely to be reversed over the coming months if the feedback to the latest Rics Residential Survey is anything to go by.

The continued weak reading for the new buyer enquiries metric is indicative of the challenges facing prospective purchasers against a backdrop of economic uncertainty, rising interest rates and a tougher credit environment.

But the tide may be turning, with Halifax, HSBC, TSB and Nationwide all announced cuts to their mortgage rates, in what the Daily Mail is dubbing a “mortgage price war”.

Halifax, the nation’s largest lender, will slash the cost of its loans by up to 0.71 percentage points tomorrow, prompting brokers to predict mortgage rates would now be lowered elsewhere.

Jamie Lennox of Dimora Mortgages said:

‘Halifax is making the single largest rate reduction I have seen from a high street lender,’ said

‘I expect others to reduce their rates this week, which could start a price war.’

Lewis Shaw, founder of Mansfield-based Shaw Financial Services, says Halifax’s move is a positive development:

It’s a welcome relief to see rate reductions, and this could be the start of a price war as transaction volumes drop and mortgage lenders need to get the sharp elbows out to hit their targets.”

But, rates are still much higher than before the recent surge. The average two-year fixed mortgage was 6.83% yesterday, according to Moneyfacts, up from 5.35% in April.

Also coming up today

The financial markets are eager to scrutinise the latest US inflation report, due at 1.30pm UK time.

Economists predict that US CPI rose to 3.3% in the year to July, up from a two-year low of 3% in June. That could create concerns that the drop in American inflation has bottomed out.

Asia-Pacific markets have dropped, amid anxiety after the White House unveiled a ban on US investment in Chinese technology.

The executive order signed by Joe Biden authorises the US treasury secretary to prohibit or restrict certain US investments in Chinese entities in three sectors: semiconductors and microelectronics, quantum information technologies, and certain artificial intelligence systems.

The agenda

• 9am BST: Italian inflation report for July

• 9.30am BST: Weekly UK economic and business activity report from the ONS

• 11am BST: Ireland’s inflation report for July

• 1.30pm BST: US inflation report for July

• 1.30pm BST: US weekly jobless data