All the signs point to it- The UK housing market is stabilising

July 30th, 2009 by admin | Filed under Daily News, Mortgages.

financial news Yet another of the UK’s leading building societies have come up with some encouraging trading figures as well as interesting statistics to add weight to the now undeniable fact that the future is looking increasingly brighter for the housing market in Great Britain.

The UK’s fifth largest mutual society, the Skipton Building Society reported an increase of 23 percent in house sales in the first six months of 2009 compared with 2008. On the down side, Skipton announced that their profits had more than halved from £43.1 million to £17 million in the first half of 2009, largely due to bad debts that had jumped £14.2 from £7.9 million to £22.1 million in the comparable period last year.

Overall, it was reported that U.K. mortgage approvals had reached levels as high as they had been since April 2008, with banks granting 47,584 home loans in June, compared with 44,169 in May according to statistics issued by the Bank of England.

And it seems that those who aren’t buying properties are blowing their cash on chocolate. This certainly seems to be the case with chocolate giants Cadbury, who have announced a 12% increase in turnover for the first six months of 2009. Despite their increased revenues, Cadburys announced a drop in pre-tax profits of £22 million, down from £134 million last year to £112 million in 2009. However a spokesman for Cadburys announced that one-off costs of over £200 million had prevented them from reporting a trading profit of £262 million, which could be translated to a 24 percent increase in true terms. Cadburys attributed their turnaround to not only increased demand for their products but also a policy of cost cutting across the board, and particularly in their advertising costs.

The Bay Restaurant Group, who own, among others the Slug & Lettuce pubs and the La Tasca restaurant chain, have announced that they have succeeded in finding additional sources of finances allaying fears of possibly closure. This is the second time 18 months that the company, which operates about 190 outlets, has required to refinance their operations. This time they secured a new three-year £150 million pound loan package with Commerzbank) of Germany and Iceland’s Kaupthing.The refinancing deal gives the company, which has twice switched owners in the last two years, “secure financial footing” for the future,

The publishing group Informa has announced a sharp decline in their interim profits. The company, publishers of the Lloyd’s List, reported an increase in turnover of just one percent at £636.3 million in the six months to June 30, while their pre-tax profits fell £27.8 million (£32.2 million from £60 million). A spokesman for the company announced that their overheads included one of restructuring and reorganisation costs of £15.8 million.

The group, announcing that its events and training business was “experiencing the most severe downturn ever in this area” as companies cut back on spending, warned that trading remained difficult and the outlook for 2010 for the company looked “uncertain”.

In London yesterday, the FTSE 100 succeeded in getting back on track, rising 18.69 points to 4647.53, while
the FTSE 250 reversed some of its losses from the previous day, up 31.43 points to close on 7,762.59

The pound continued to stutter on Wednesday against the leading currencies, falling against the dollar whilst rising against the Euro, Yen and Swiss Franc.

Pound/US dollar 1.6381
Pound/Euro 1.662
Pound/Japanese Yen 155.6911
Pound/Swiss Franc 1.782

According to figures issued by the Federal Reserve, economic activity in the US has “begun to stabilise. Whilst the economy “continued to be weak going into the summer”, with sluggish retail activity and weak labour markets being key factors, signs are that t the pace of decline moderated over the last month.

However this little item of optimism failed to lift stock markets after earlier figures showed an unexpected fall in orders for US manufactured goods.

The Dow Jones closed down 26 points to 9070.72 The NASDAQ slipped back slightly after an impressive run, dropping 7.75 points to close on 1967.76

Like two aging Aunties clinging together for support, Yahoo and Microsoft have announced that their long rumoured cooperation on the internet search market is eventually going to happen. The move is planned as a slip on the wrist for these naughty boys at Google. Under the deal, Microsoft’s Bing search engine will power the Yahoo website and Yahoo will handle all aspects of selling advertising for Microsoft’s Bing search engine.

Yahoo, who have been struggling to make profits in the last few years, rejected several overtures from Microsoft to acquire the company, preferring to go it alone. This move seems like an ideal compromise situation, although the market was less enthousiastic, with Yahoo shares closing down 12.1% on the day, while Microsoft shares moved up by a mere 1.4%.

The price of crude oil has continued to drop after figures showed a continued increase in US oil stockpiles amid uncertainty in the American manufacturing sector.
US light crude fell $3.96, almost 6%, to $63.27 a barrel. London Brent dropped $3.24 to $66.64 a barrel.