Housing market takes a tumble.

April 28th, 2009 by admin | Filed under Daily News, Recession, Retail, The Markets, UK Banks.

There appears to be no arguing with statistics, and the one that says that UK property values for 2009 will reduce by close to 20% as has been predicted. It appeared that property prices were indeed bucking the trend, yet March’s figures showed a 0.3 decline and it appears that April figures will be less than optimistic. It now appears that an overall decline of close to 37% from their peak in 2007 is inevitable, with 2009 being the worst year, where prices will fall by around 2.5%.

Currently the average costs of a house in the UK is around £ 55,000

The decrease in property values is being driven by the reluctance of first time buyers to take a chance on the market, which seemed to be improving just a few weeks ago; however mortgage fell last month for the first time since the end of 2008.

The bank of England hastened to explain that their “quantative easing” scheme is yet to fully kick in, and once it would borrow terms would be less restricted and the public should be more inclined to invest in property. Forever anticipating the demand, rumours have it that finance provider Virgin Money has intimated interest in acquiring certain of the more juicy parts of the Northern Rock building society, when the company is sub divided towards the end of 2009.

Virgin Money is seemingly interested in acquiring seventy high street branches of Northern Rock

There was a lot of nervous coughing and sneezing on the FTSE yesterday with airlines and travel company shares being hard hit as the market began to take into account the possible economic impacts of the swine flu outbreak.

With the flu outbreak in Mexico spreading rapidly with isolated cases already reported in US, Canada, Spain as well as the UK, shares in British Airways dropped by 7.7%, while London quoted cruise giant Carnival could only lie back and watch their shares lose 6.8% on the day’s trading.

But to prove that every cloud does indeed have a silver lining, shares in drug companies took a major turn for the better, with Roche, who have a very important niche in anti-flu drug market having a very good day.

Also basking in shades of victory yesterday were U.K. sportswear retailer JJB Sports PLC whose shares jumped by 31% Monday, after the firm’s creditors eventually agreed to back the company’s hard worked for rescue plan, which will considerably ease the company’s current rental burden and release valuable funds to aid the company’s survival plans. JJB’S success in renegotiating rents is expected to set a precedent for many other retailers in similar positions.

Telecoms stocks were also at the forefront among the profit earners yesterday. Shares in Vodafone rose 2.4 per cent (3 pence to 125.45) after its US joint venture m Verizon Wireless produced some very favourable results

In the oil sector, BP were the stars in a weak sector, with their shares rising 0.9 per cent to (4.5 pence to 483) ahead of today’s first-quarter results.

The retails sector showed some restrained excitement, largely fired by rumours focused on the Sainsbury group. Whether the rumours have any foundation remains to be seen, however the company’s shares pushed up by 1.5 per cent (5 pence to 328)

Overall the FTSE 100 recovered from an early drop to close up 11.02 points to 4,167.01. The FTSE 250 index did a lot worse, dropping 90 points to close at 7,279.93

Sterling fell slightly against the dollar and the Euro and held its own against the Japanese Yen and the Swiss Franc:

Pound/US dollar 1.4563

Pound/Euro 1.119

Pound/Japanese Yen 139.27

Pound/Swiss Franc 1.6817

Fears that a swine flu outbreak could turn into a global pandemic was the principal symptom that caused Wall Street shares to have a weak day’s trading.

The Dow Jones Average dropped 51.29 to close at 8025. NASDAQ also fell 14.88 points to close on 1679.41

The market spluttered and wheezed all day as companies tried to wear down who would lose and who would stood to benefits benefit from the outbreak.

American Airlines shares plummeted by 13.3 per cent to $4.70, with Delta Air Lines also dropping by 14.3 per cent to $6.75. Investors rapidly pinpointed that the travel industry would be the first to suffer and rapidly cancelled their travel plans. Hotel chain Marriott, dropped 5.1 per cent and online travel agency Expedia suffered a similar fate, with their shares dropping 6.3 per cent.

The projection that the demand for steel demand is likely to fall by around 15% cent this year seems to be also accurate. If the current slump continues, According to forecasts issued Monday by the World Steel Association, it will be the greatest in the industry since the end of World War Two.