LONDON: British house prices fell 1.0% in March, their first drop since September 2023, figures from mortgage lender Halifax showed on Friday, contrasting with the more upbeat picture from other housing data earlier in the week.
Halifax, part of Lloyds Banking Group, Britain‘s largest mortgage lender, said the drop was not entirely unexpected after price rises in the previous five months and continued high interest rates.
But it leaves prices just 0.3% higher than a year earlier – below both the median forecast for a 1.45% rise in a Reuters poll of economists and the 1.6% increase reported on Tuesday by Nationwide, Britain’s second-largest mortgage lender.
In recent months, activity in Britain’s housing market has been recovering after a slump in late 2022 when Liz Truss’ brief term as prime minister roiled financial markets and the Bank of England raised interest rates more sharply.
BoE data on Tuesday showed that February had the highest number of mortgage approvals since September 2022, as wage growth began to outpace inflation and BoE rate cuts became a more concrete possibility.
However, Halifax director Kim Kinnaird said financial markets had become less optimistic about the degree and timing of rate cuts due to stickiness in some underlying inflation measures.
“This has stalled the decline in mortgage rates that had helped to drive market activity around the turn of the year,” she said.
Investors currently expect the BoE to start cutting rates in June or August, and for rates to fall to around 4.5% by the end of the year from 5.25% now.
Imogen Pattison, an economist at consultants Capital Economics, said Halifax’s house price data tended to be more sensitive to movements in interest rates than Nationwide’s.
“Looking ahead, we expect mortgage rates to remain higher than in January and February and hover at just under 5% over the coming months, which will subdue demand and prevent further gains in house prices,” she said.
House prices are still around 20% above their level before the COVID-19 pandemic – mirroring big rises seen in many other advanced economies – after moving in a fairly narrow range since the spring of 2022, Halifax said.
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House prices in Northern Ireland increased by 2.9 per cent to reach an average of £207,010 (€242,534) in the final quarter of last year, according to research from Ulster University.
The findings from the latest Northern Ireland Quarterly House Price Index show prices remained stable and continued to edge higher throughout 2023. This trend continued in the last three months of 2023 as the average house price increased by 0.4 per cent.
The research also shows signs of slowing market activity with transactions at their lowest level over the year, decreasing 26 per cent on the previous quarter.
“While the seasonal effects of Christmas and New Year traditionally see a slowing of market activity, a slight dip in buyer confidence remained in the last quarter of 2023 as the uncertainty of interest rates acted as a key factor for mortgage holders and prospective buyers alike,” the report noted.
“Encouragingly, the recent decision to keep the interest rate stable at 5.25 per cent is seemingly paving the way for more attractive mortgage deals.”
The data also shows minor declines in the cost of fixed, variable, and tracker rate mortgages during the final quarter of the year, indicating this trend could continue softening rates throughout 2024.
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“Lenders are motivated to build their loan books and attract customers, meaning that new borrowers or those remortgaging during 2024 may benefit from appealing deals and rates available,” the report said.
Separately, Northern Ireland has been named as the fastest-growing region in the UK for newly registered companies in 2023 in a new index from Ulster Bank and Beauhurst.
The boom in the number of start-ups was noted in the New Startup Index which found that Northern Ireland gained 14,000 new companies in 2023, which was a 59 per cent increase on 2022.
Belfast was hailed as the fastest-growing council area in the UK by number of newly registered companies, with a 123 per cent increase in the number of new businesses.
Causeway Coast and Glens, and Lisburn and Castlereagh also made the top 10 by growth in the number of companies incorporated, with the number of new businesses growing by 61 per cent and 54 per cent respectively since 2022.
The retail sector was responsible for the largest rise in the number of new businesses in Northern Ireland with 3,605 new companies set up.
Mark Crimmins, head of Ulster Bank, said: “These new ventures are predominantly small businesses, owned and run by local people, which will play an important role in supporting the growth of Northern Ireland’s economy.”
The rise in new businesses in Northern Ireland is a trend that is replicated across the UK. Some 900,000 new companies were incorporated in the UK in 2023, making it a record year for new businesses.
At a UK-level, the growth in female-founded businesses also continues to increase year on year, with a record 164,000 companies incorporated by women in 2023, up 4 per cent on 2022 and taking growth in the five years between 2019 and 2023 to 26 per cent overall.
China’s spy agency said Monday the head of a foreign consultancy had been found to be spying for Britain’s MI6 intelligence service.
The Ministry of State Security said in a WeChat post that Britain’s Secret Intelligence Service — also known as MI6 — used a foreign national with the surname Huang to establish an “intelligence cooperation relationship”.
Huang, who headed a foreign consulting agency, “entered China several times under instructions to use their public profile as a cover to collect China-related intelligence for Britain… and seek other personnel whom MI6 could turn”, the MSS said.
Huang allegedly passed 17 pieces of intelligence, including confidential state secrets, to MI6 before he was identified, according to the MSS.
The ministry said a subsequent investigation had “promptly discovered criminal evidence that Huang was engaged in espionage activities, and took criminal coercive measures in accordance with the law”.
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The statement did not provide further details of Huang’s identity or employer, or describe their current condition or whereabouts.
Britain’s embassy in Beijing directed an AFP request to comment to the foreign office in London, which did not immediately respond.
AFP was not able to independently verify Beijing’s claims.
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China and Britain have traded barbs in recent months over allegations of perceived espionage and its resulting impact on national security.
Britain’s government has warned that Chinese spies are increasingly targeting officials, and a researcher in the country’s parliament recently denied he was spying for Beijing.
China last year also conducted raids on a string of big-name consulting, research and due diligence firms.
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Last May, China said it had raided the offices of US consultancy firm Capvision in order to safeguard its “national security and development interests”.
Beijing also questioned staff at the Shanghai branch of another American consultancy, Bain, in April.
And authorities detained workers and shuttered an office belonging to US-based due diligence firm Mintz Group in March.
The US government and its chambers of commerce warned that the raids damage investor confidence and the operations of foreign businesses in China.
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