London house prices down 2.9% on the month

UK house prices fell 1.2% on the month in September, with a decline of 2.9% in London, according to figures released by Rightmove.

The price drop is the first monthly fall for the late summer/early autumn period since 2013. The average asking price for a UK property is now £310,000. In August, prices fell 0.9% across the country.

The price drop excluding the capital market is 0.5%. London’s more affluent boroughs have seen the steepest price declines, with prices in Kensington & Chelsea down 14.3% on the month, while Hammersmith and Fulham were down 1.5%.

Other London boroughs saw prices increases; Hackney prices rose 5.2% while Fulham properties rose 9.4%. Asking prices rose 1.1% on a year-on-year asking price basis following a 3.1% rise in August.

Miles Shipside, director of Rightmove said: “As we enter autumn selling season it is usual to see estate agents advising new-to-the-market sellers to push up their asking prices. But this year all four southern regions have seen new sellers on average asking less than those of a month ago, reducing the rate of national increase.”

Shipside added that estate agents were likely advising sellers to lower price expectations in the hope that this would generate greater buyer interest.


South Wales to get zero-emission black cab plant

Norwegian aluminium company Sapa has announced plans to invest £9.6m in an automotive plant in Caerphilly, Wales in order to produce a new generation of eco-friendly London black cabs.

The new plant will create more than 130 jobs in Bedwas, South Wales on a site which was mothballed by Sapa in 2014 due to tough market conditions and over capacity, according to the Guardian. The plant was previously used for aluminium extrusion but will be refurbished for the change of purpose.

The move comes as manufacturing confidence is faltering due to uncertainty over Brexit. Financial backing of £550,000 from the Welsh government was given as the reason why Bedwas was chosen over another of Sapa’s European sites.

The new factory will be producing cabs for the London Electric Vehicle Company, which is developing a zero-emissions taxi ahead of moves to ban diesel and petrol cars and vans in the UK from 2040. London is already subject to a congestion charge and Low-Emission Zone.

Production will commence at the plant from late 2017, using materials sourced from Spain. Output will increase steadily over the next five years.

Welsh First Minister Carwyn Jones said: “The opening will create a range of new job opportunities and give a new lease of life to the area.”


John Lewis Partnership profits fall 53.3%

Profits of the John Lewis Partnership have fallen more than 50% following a major programme of restructuring and redundancies, according to the BBC.

A £56.4m transformation programme meant that profits before tax fell 53.3% to £26.6m for the two quarters ending July 2017. Operating profits for the John Lewis department store rose 10% but Waitrose operating profits fell 18% due to higher costs.

John Lewis Partnership Chairman Sir Charlie Mayfield said that inflation and a weak pound had contributed to the drop: “This is a tough market for retailers. There’s any number of reasons for that. The reason our profits are down is predominantly because of margin, and cost prices are rising. It’s a very competitive market, retail prices are not rising as fast.”

Mayfield said that the retailer had chosen to absorb higher costs caused by inflation, using the Partnership’s cash reserves.

A statement from John Lewis also said spending on the reorganisation was an investment for the future and that the chain was moving forward.

Mayfield said: “While it’s been a difficult first-half, our sales have still been up, our profits are down, but we’ve made some really important progress for the future.”


Economists do not expect interest rate rise until 2019

A survey of economists has revealed that UK interest rates are not expected to rise until 2019, despite inflation being above the Bank of England’s target.

A BBC survey found that the majority of economists believed the Bank of England Monetary Policy Committee (MPC) would not raise interest rates while Brexit negotiations are ongoing. Inflation is currently at 2.6%, above the official target rate of 2%.

The base interest rate has been at the record low of 0.25% since August 2016. Prior to that it stood at 0.5% since March 2009.

External MPC member Michael Saunders said in August that he thought interest rates should be raised soon to offset inflation. Saunders told a Cardiff conference: “We do not need to be putting the brakes on so much that the economy weakens sharply, but our foot no longer needs to be quite so firmly on the accelerator in my view.”

However, in the August meeting of the MPC, only Saunders and fellow member Ian McCafferty voted for an interest rate rise. The remaining six members voted to retain the current interest rate.

Saunders said that an increasingly constrained labour market, partly due to fewer EU migrant workers coming to the UK, pointed to a need for higher interest rates. In Q2 2017 the proportion of people aged 16-64 participating in the labour market reached a record high.

UK unemployment falls to record low

The percentage of households with no adults in employment has fallen to a record low of 14.5%, according to data released by the Office for National Statistics (ONS).

Almost 3 million households housing over 4 million people had no working adult, the lowest rate since records began in 1996. The official rate of unemployment is also at a record low of 4.5%, well below the figure of 6.5% generally used by economists to indicate full employment.

While these figures may sound positive, to get a full picture the level of inactive workers should also be considered. This includes people such as students, retired people, part-time workers who would prefer to work full-time, carers and those at home due to sickness or disability.

When inactive workers are included in the figures, the level of joblessness reaches 21.5% of the full workforce, according to the ONS. This figure is around four times greater than the official unemployment figure preferred by the government.

Joblessness is also not distributed equally among the nation’s households but concentrated in around one in seven (14.5%) of homes where no-one aged 16 or over is in employment.

When the ONS began compiling its Labour Force Survey in 1996, the proportion of workless households was 21%. Since then, the proportion of households where all inhabitants are working has risen from 52% to 58%. Particular change has been seen among lone parents; two thirds (68%) of these are now in employment, the highest proportion on record.

Work and Pensions Secretary David Gauke told the BBC that “With record levels of employment, more people across the country now have the ability to support themselves and their families. That means more children growing up with a working adult and more children who can see first-hand the benefits of being in employment.”

Labour’s shadow employment minister Margaret Greenwood said: “While any increases in employment are positive, under this government work is no longer a reliable route out of poverty with over half of those living in poverty coming from a working household.”

Can online estate agencies disrupt an entrenched property industry?

Offline agents have for a long time dominated the real estate industry and led many people to believe that they are unshakable. The revolution on how people buy and sell property began like one and a half decades ago in the UK with the arrival of portals such as Right move. The big debate currently is on the effects of the entry of online estate agencies on entrenched property industry.

Availing of information

In a traditional setting, homeowners had limited information on the value of their property. The realtor can take advantage of the customer’s ignorance and charge high commissions for a home sale. The today’s buyer has access to information online which one can use to make vital decisions. Such a customer does not see the need to pay an agent to give information that is available on various websites for free.


Some properties take days while others take months to sell at the hands of realtors. There have been a lot of bureaucracies in the property when it comes to payment. The clients need agents who can link them to financiers with a loan calculator readily available to speed up the process. They can also use virtual home staging apps which illustrate the sale process. Some online agencies can take 48 hours to close a deal.


The commissions that traditional brokers charge are sometimes unrealistic and can take large amounts of one’s property. The market now has people with competitive and new pricing models which make the market leaders rethink their strategies. It is common to find free property valuation portals which potential customers use and thus save some money.


Traditional Realtors have isolated buyers and sellers for a long time in the selling process. With current innovations, the seller has control of the process which makes it fulfilling. The customer can take virtual tours to the dream home so as to make informed decisions. The seller can also schedule for home viewing without inconveniencing any of the parties.

Outdated marketing techniques

Use of brochures and sign posts have little exposure and can take ages before you land a client. The modern customers use online platforms due to the convenience and this is also a trend in property markets.

The largest share of the property market is still in the hands of traditional real estate agents. There are daily innovations and digital disruptions that come with direct and indirect impacts on this sector. High street agents are now using a combination of direct customers and online classifieds to sell properties.

Consumers raise a glass to celebrate Britain’s sporting success

Britain’s supermarkets have seen alcohol sales rise as shoppers celebrated the country’s success at the Olympic and Paralympic Games.

Market research firm Kantar Worldpanel on Tuesday released its latest figures for the grocery sector, showing that supermarket sales increased by an overall 0.3% in the 12 weeks to 11 September 2016, despite continued deflation of 1.1%. Alcohol sales performed particularly well.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: ‘While overall sales growth has been slow, consumers have been keen to celebrate Britain’s Olympic and Paralympic golden summer, boosting alcohol sales by 8.5% in the past four weeks. Sparkling wines including Prosecco and Champagne led the way with growth of 36% as promotional events across a number of retailers successfully tapped into the nation’s celebratory mood.’

Looking at individual retailers, market leader Tesco had a successful summer ‘Drinks Festival’ which helped grow its alcohol sales faster than any other major category.

McKevitt noted that, although Tesco’s sales have not yet returned to growth, a decline of 0.2% year-on-year is its best performance since March 2014. During the period its market share declined 0.1 percentage points and Tesco now accounts for 28.1% of the overall grocery market.

Sainsbury’s is in second place on 15.9%, followed by Asda (15.7%), Morrisons (10.4%) and the Co-op (6.6%).

‘Co-op continues to outperform the market with sales growth of 3.1%, primarily through its own label lines,’ McKevitt said. ‘The convenience retailer was another to post strong alcohol sales, though its produce lines were its fastest growing category, helping market share increase to 6.6%.’

Discounters Aldi and Lidl are also going from strength to strength: Aldi increased its sales by 11.6% in the 12-week period and Lidl saw sales rise 9.5%.

Both chains are benefiting from opening more stores as well as an increased spend per customer.

‘Aldi and Lidl continue to grow – not only are both continuing to expand their store estates but existing customers are visiting more frequently and upping their basket size,’ McKevitt explained.

‘The discounters are helping drive the industry-wide growth in premium own-label lines, with marketing campaigns moving away from showcasing only price to a focus on quality – collectively, premium own label grew by 29.5% in the discounters this period,’ McKevitt added.

‘Shoppers now spend an average of £19.24 when visiting the discount retailers and at a time of falling prices this increase of 4% is not to be sniffed at.’

Survey shows drop in UK business confidence

Business confidence in the UK has fallen as the country faces an uncertain economic outlook and a slowdown in demand.

A new survey by Lloyds Bank shows that confidence among small and medium sized businesses is at a four-year low. The Business in Britain report, published by the bank on Monday, questioned over 1,500 UK companies to understand the overall balance of opinion on a range of performance and confidence measures, weighing up the percentage of firms that are positive in outlook against those that are negative.

The reportís confidence index – an average of respondentsí expected sales, orders and profits over the next six months – declined to 12%, down from 38% in January 2016.

Confidence fell in every sector, but the decrease was biggest in services including retail and wholesale, hospitality and leisure, and business and other services.

According to Lloyds Bank, the most commonly identified threat cited by companies for the next six months was economic uncertainty (27%), followed by weaker UK demand at 18%.

Tim Hinton, managing director for Mid Markets and SME Banking at Lloyds Banking Group, said: ‘Business confidence has taken a hit since our last report in January, but this should be viewed in the context of the recent economic and political shocks.

‘The EU referendum vote has introduced a level of uncertainty for companies as the UK decides on the best model for its future relationship with the EU, and this is likely to continue for the foreseeable future. Whilst sentiment has fallen to a four-year low, it remains well above the lows reached during the global financial crisis of 2008/9.’

A closer look at the survey results shows that the net balance of exporters anticipating an increase in total exports across the globe fell by 15 percentage points to 20%. There was also a 14-point drop to -1% in the net balance of companies expecting an increase in headcount over the next six months, and the net balance planning to raise their capital expenditure also declined, falling from 14% to zero.

Lloyds reported an increase in spare capacity among survey respondents: the percentage of businesses indicating that they are operating at full capacity fell back slightly to 49% from an all-time high of 52% in the last survey, and the proportion citing difficulties in recruiting skilled workers fell to a two-year low of 38%.

Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, commented: ‘All of the key metrics in the Business in Britain survey, including the outlook for demand, employment and investment, have weakened since January’s report. This indicates that economic growth is likely to slow in the next six months, following a relatively robust performance in the first half of the year.

‘Even though inflation is expected to pick up as a result of the weaker pound, this may be offset by the survey findings of a fall in capacity pressures within firms and a fall in recruitment difficulties.’

Can Technology Combat the Cost of Living Increase?

The cost of living in the UK is constantly rising just as it is everywhere in the world, but is it always the case that everything around now costs more? In April 2016 the government introduced the National Living Wage for all people aged 25+. Designed to replace the minimum wage for those who are more likely to have household bills and a family to support, the £7.20 per hour minimum was designed to meet the current costs of living in the UK.

While many have argued that the hourly rate is still too low to afford people an acceptable standard of living, the innovation is a clear sign that government is trying to address the issues faced by many. To illustrate the point, the average cost of a basic standard of living in the UK back in 2008 was £13,400 according to research by the Joseph Rowntree Foundation. In contrast, the 2016 stats suggest that the average family needs to earn at least £24,801 each year just to meet the minimum standards of living.

Costs Continue to Increase but Not in All Instances

For those trying to raise a family, the prospect of having to earn £24,000 minimum can be daunting one, but it’s also worth noting that price increases aren’t a universal phenomenon. In fact, thanks to modern technology, the cost of some of life’s luxuries has actually decreased over the last decade.

According to a report by Voucherbox, items such as TVs, laptops, phones and even taxi rides actually cost less now than they did in 2006. For example, if we look at the cost comparison chart we can see that mobiles have come down in price by almost £150. In 2006, a top-of-the-line Motorola Razr V3 cost £500 brand new. Today, the infinitely more powerful iPhone 5S can be picked up for £359.

Similarly, the average cost of a laptop in 2006 was £700, but in 2016 you can pick up a portable device for £300. Of course, as technology matures and companies compete for a share of the market, prices drop. However, that’s not the only reason: if you take the cost of a taxi ride, you can see that technology has actually helped people save money.

Thanks to companies like Uber, the average cost of a trip according to Voucherbox’s research is now £60 compared to £70 (traditional taxi) back in 2006. We know the price of petrol hasn’t decreased in that time (it’s actually risen from 89.4p per litre in Jan 2006 to 101.9p in January 2016), so it must be something else causing a decrease.

Technology May Offer a Solution

Uber has basically blown the taxi market wide open and allowed commuters to connect with more drivers. This increase in availability has driven down the cost of a taxi journey in spite of the increase in fuel prices. Although an isolated example, Uber has shown that technology has the power to decrease the cost of living. In fact, when you take into account innovations such as comparison sites that allow customers to find cheaper energy, holiday and insurance deals, there’s a lot to be hopeful for.

The overall cost of living may continue to rise, but technology can certainly help those at the lower end of the earning spectrum. Of course, government intervention is always important, but there are clearly ways in which technology will continue to cut costs in certain areas of our life.

UK service sector sees slower growth, drop in optimism

Optimism in the UK’s dominant services sector declined in the three months to August, according to the latest quarterly report from the Confederation of British Industry (CBI) released on Tuesday.

The Service Sector Survey showed that the pace of business volume growth slowed in the business and professional services sub-sector, and remained stable in consumer services.

However, optimism in both sub-sectors fell sharply. In business and professional services, it fell at the fastest pace in nearly five years (since November 2011), the CBI reported. In consumer services, optimism dropped at the fastest rate since the financial crisis (February 2009).

During the quarter, investment plans for the service sector as a whole were brought back into line with long-run averages, following a stronger start to 2016. Business and professional services firms expect to maintain investment spending on land and buildings, while spending on vehicles, plant & machinery will be scaled back over the next year. In consumer services, investment in land and buildings will continue to grow, but at a slower pace, while spending on vehicles, plant & machinery will be flat on the year. IT expenditure will continue to show robust growth.

The CBI found that employment growth in both sub-sectors remained above average in the three months to August, and was at the strongest level this year in consumer services, but is expected to slow over the next quarter.

Service sector firms continued to invest in their employees: growth in spending on training and retraining remained resilient in the three-month period.

Commenting on the findings, Anna Leach, head of economic analysis and surveys at the CBI, said:

‘Whilst the service sector has been rocked by the stormy waters of Brexit, especially when it comes to firms’ sense of optimism, the actual slowdown in growth on the office and shop floor has been relatively modest.

‘It’s encouraging that employment numbers have remained robust, especially in the consumer services sector. But looking ahead, the service sector faces a challenging environment in which to grow and invest, with uncertainty about demand weighing on firms’ minds.

‘To shore up confidence across the economy, the Government must clearly communicate plans for negotiations to leave the EU, and demonstrate its commitment to stimulating growth and driving investment with an ambitious Autumn Statement.’