House prices jump by the most in seven years

UK house prices soared by an annual 10.9 per cent in May, the most in nearly seven years, mortgage lender Nationwide said.

Property values hit a new record average of £242,832, up by £23,930 compared with 12 months earlier. May’s jump followed a 7.1 per cent year-on-year increase recorded in April.

“The market has seen a complete turnround over the past 12 months,” Robert Gardner, Nationwide’s chief economist. “Our research indicates the extension to the stamp duty holiday is not the key factor, though it is clearly impacting the timing of transactions . . . It is shifting housing preferences which is continuing to drive activity, with people reassessing their needs in the wake of the pandemic.”

Briefly

JD Sports denied that it has stepped up succession planning for boss Peter Cowgill. In response to a Times article that cited JD Sports’ annual report, the retailer said is was “not engaged in a process to recruit a chief executive officer or chair” but that it is “continually reviewing the depth of its management team”.

Amigo, the guarantor lender, said it won’t be pursuing an appeal of the recent high court ruling that blocked its plans to cap compensation to customers mis-sold loans. The company delayed publication of full-year results and said it continues to consider all options including insolvency.

Hyve said it is currently considering funding options, with the events organiser responding to a Sky News report that it is in talks with private equity group Carlyle about a capital injection. Hyve said it will prioritise minimal dilution to existing shareholders as well as the optionality to move quickly as earnings accretive acquisition opportunities arise. Discussions regarding any potential investment remain at an early stage, it said.

DIY retailer Wickes said trading through spring has beaten expectations and that full-year profit will be towards the top of forecasts. Total like-for-like growth in the 21 weeks to late May was up 45.7 per cent year on year and 23.1 per cent ahead of pre-pandemic levels, it said. Trading was notably strong through April, driven by sales volumes in both local trade and DIY, while May has settled back in line with expectations, the company added.

Biffa posted a 59.6 per cent drop in full-year underlying pre-tax profit to £29m as lockdowns closed its waste facilities. Impairments and contract provisions meant the headline pre-tax loss was £52.8m. The company said it was encouraged by its recent trading performance. 

Advertising agency M&C Saatchi said recent trading has been stronger than anticipated and that full-year results will be ahead of consensus expectations. 

Carpet retailer Victoria said trading had remained “very strong” across all its geographies and product groups, with double-digit percentage increases over 2019.

Victorian Plumbing revealed plans to float on London’s Aim segment. The bathroom products and accessories retailer, which reported revenue of £208.7m and adjusted ebitda of £26.2m in the financial year ended September, said it was targeting a June 22 debut.

Beyond the Square Mile

Accountancy group EY is to centralise power in a new European executive team, pooling resources across the region but raising concern that any financial hit from the Wirecard scandal might also be shared. The overhaul breaks from the federated business model of the Big Four firms in an attempt to cut management costs by half and will authorise the central team to decide on partners’ pay, according to people briefed on the plan.

The world’s largest food company, Nestlé, has acknowledged that more than 60 per cent of its mainstream food and drinks products do not meet a “recognised definition of health” and that “some of our categories and products will never be ‘healthy’ no matter how much we renovate”. The findings of a presentation circulated to senior managers and seen by the Financial Times come as foodmakers contend with a global push to combat obesity and promote healthier eating.

New figures show the IPO market has cooled substantially since a red-hot first quarter. In January and February, the shares of companies joining the New York Stock Exchange or Nasdaq rose on average more than 40 per cent from their IPO price on the first day of trading, according to data from Dealogic. In March and April, the average “pop” had dropped closer to 20 per cent, and in May it fell further to an average 18 per cent as of the middle of last week.

Essential comment before you go

Bill Gross Cash has been trash for years but soon it may be the only haven for investors sated beyond reasonable expectations of perpetually low yields and supportive bond kings and queens at the Fed.

Martin Wolf The 2020s are decisive for the UK because the country must grapple with recovery from Covid-19, the aftermath of Brexit, an ongoing technological revolution and the transition to net-zero emissions of greenhouse gases. Moreover, it does so from a base of stagnant productivity, high inequality, rapid ageing and high debt. Only a frivolous person would assume that this is sure to work out.