September 27, 2016
Pegler’s market report – 27.09.16: Housing market picks up speed in August
As published in the Brighton Argus (27.09.16) Business on page 21 under the title Pegler’s Market Report:
Housing market picks up speed in August
Mortgage lending climbed sharply in August, reversing the post-referendum fall in July and taking the market to its highest summer level since 2007. At the same time the Bank of England said that the range of loans on offer for buyers with small deposits has improved so much that the Help to Buy mortgage guarantee scheme, introduced in 2013 to aid those with small savings, is no longer needed.
The housing market has been choppy this year as a rise in stamp duty for buy-to-let investors caused sales to spike in March and then fall back in the following months – a trend that continued when uncertainty after the Brexit vote caused some parts of the market to stall. But new figures from the Council of Mortgage Lenders (CML) indicate the distortion of the extra tax and the slowdown caused by the referendum vote in June may now be over, putting the market back on its previous upward trajectory.
The FTSE 100 had a better week and climbed back above 6,900 for the first time in 17 days after risk appetite returned to the market after the Fed left interest rates unchanged and projected a less aggressive path for hikes next year.
Premier Inn and Costa Coffee owner Whitbread found itself among the laggards following research which found that Costa has a less loyal fan base and lower awareness than its competitors in China. In its most recent taring update, Whitbread flagged that the China coffee trading environment had become tougher due to the weaker Chinese economy.
Over on Aim, sports nutrition brand Science in Sport, which is brand ambassador to the likes of Chris Hoy and Liverpool Football Club, rose on the back of a robust set of interim results. The group enjoyed revenue growth of 24pc to £6.5m.
In the US, there was speculation that Twitter could soon receive formal bids from several technology giants looking to buy the embattled social network. Names in the frame included Google and Salesforce. The social network, which has been struggling to reverse a stall in growth, revealed its second quarter of losses in July amounting to $106m (£81m). Twitter’s board of directors is reportedly open to a deal, but a sale is not imminent.
By David Pegler, Brighton Capital Management