London pre-open: Stocks to edge up; Rightmove data in focus

21st Oct 2024 07:39

(Sharecast News) - London stocks were set to edge up at the open on Monday as investors mulled the latest house price data.

The FTSE 100 was called to open around eight points higher.

Earlier, the People's Bank of China cut the one-year and five-year loan prime rates from 3.35% and 3.85% to 3.10% and 3.6%, respectively, in line with market expectations.

Danske Bank said: "This comes as China seeks to support growth and stabilize the faltering property sector. The one-year LPR primarily affects corporate loans and most household loans, whereas the five-year LPR serves as a benchmark for mortgage rates."

On home shores, the latest house price index from Rightmove showed the number of homes being put up for sale surged in October, holding back selling prices.

The number of available homes for sale was up 12% year-on-year, the highest per estate agent since 2014.

Underlying buyer demand also remained strong, with the number of people contacting agents spiking 17%, despite uncertainty around the forthcoming Budget.

But it meant that house price growth was curtailed and the national average asking price edged up just 0.3% to £371,958. Rightmove said that the "muted" autumn bounce was well below average growth for October of 1.3%.

"With a greater choice of properties to consider, buyers are making use of their increased negotiating power, helping to keep price rises subdued," it noted.

The number of sales being agreed surged 29% as the market rebounded strongly from quieter conditions a year previously.

Tim Bannister, director of property science at Rightmove, said: "With the ball in the buyer's court and the pick of a big crop to choose from, sellers need to be pricing competitively to find a buyer, particularly with affordability still very stretched.

"We're not seeing activity slow down, but some estate agents report that some movers are now waiting for Budget clarity and anticipated cheaper mortgage rates later this year."

The Bank of England, which ramped up interest rates to tackle surging inflation, cut the cost of borrowing in August for the first time in four years.

Rates were then left on hold in September, but another 25 basis point reduction is widely expected at the Monetary Policy Committee's next meeting in November. Some believe a further cut will then follow shortly afterwards, in December.

Rightmove said that the 2025 outlook for the housing market remained positive, although it acknowledged ongoing affordability pressures.

In corporate news, pharma giant AstraZeneca announced that its Wainzua nerve damage treatment has been recommended for approval in the EU.

Wainzua, otherwise known as eplontersen, has already been approved in the US for use in the treatment of adults with polyneuropathy - a disease of the peripheral nerves - associated with hereditary transthyretin-mediated amyloidosis.

If approved by the European Commission, Wainzua will be the only approved medicine in the EU for the condition that can be self-administered on a monthly basis.

Elsewhere, FirstGroup announced the acquisition of Anderson Travel, a coach operator providing contracted school, private hire, mini coach and tour services in and around London, for an undisclosed sum.

The operator has around 40 coaches of varying sizes with bases in central London and Heathrow.

FirstGroup said the deal will extend First Bus' operational footprint and forms part of the group's strategy of targeted acquisitions to grow its share of the UK adjacent services market.