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Nationwide says UK house prices up again House prices recorded a second month of growth, across the UK, in November, according to the Nationwide Building Society. Jeremy Naylor | Analyst, London | Publication date: Friday 01 December 2023 12:01 At that earlier point it said that the reason for the rise was that there were fewer and fewer houses coming onto the market and with that restricted supply it was keeping up pricing across the price curve. Despite a monthly gain, prices are down 2% down on an annual basis – but this is still outperforming the expectations of economists in a poll for the Reuters news agency which had forecast a 2.5% decline. This latest report comes just days after Bank of England data showed a leap in mortgage approvals in October. UK house prices UK house prices have unexpectedly risen for the second month in a row, according to the Nationwide Building Society. In November, prices increased by 0.2%, following a 0.9% rise in October. This surprising growth can be attributed to a limited supply of homes entering the market, including both new builds and resales. Although prices are still 2% lower than last year, this is better than the anticipated drop of 2.3% that economists predicted. This news comes after the Bank of England reported a surge in mortgage approvals in October. Consequently, major housebuilding companies like Persimmon and Barrett Developments have seen significant increases in their share prices. The FTSE 350 Household Goods and Home Construction Index The positive impact on the housebuilding sector is evident in the FTSE 350 Household Goods and Home Construction Index, which includes Persimmon and Barrett Homes among other prominent builders. The index has reached levels not seen since May this year. Barclay, which will release its half-year figures next week, has also experienced substantial gains, reaching its highest price since January 2022. Redrow, another house builder, has also seen similar increases, although it is slightly below its recent peak. Taylor Wimpey, on the other hand, has reached levels not seen since May this year. Overall, the Nationwide Building Society's positive figures have had a beneficial impact on the housebuilding sector, leading to significant gains for various companies. The Bank of England's data This unexpected rise in UK house prices has defied economists' predictions, who had expected a decline. The limited supply of housing stock entering the market has contributed to the price growth. Furthermore, the Bank of England's data showing a surge in mortgage approvals during October suggests increased demand for housing. As a result, the housebuilding sector has received a boost, as seen in the significant gains in share prices for companies like Persimmon, Barrett Developments, and Barclay Homes. This positive trend has spread to other builders, including Redrow and Taylor Wimpey, which have reached levels not seen in several months. Although prices are still down compared to the previous year, the smaller decline compared to economists' predictions is seen as a positive outcome This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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With many benchmark indices scoring their best month, in November, in several quarters, can we still expect a Santa Claus rally in December? IGTV caught up with Ron William from RW Advisory, unerthing what a Santa Claus rally is. Jeremy Naylor | Analyst, London | Publication date: Friday 01 December 2023 16:29 (Partial Video Transcript) Finding the magic in a Santa Claus rally As we start out on the month of December, a lot of the anecdotal commentary about where we go in the month is all about the much-lauded Santa Claus rally. Is it fact or is it fiction? Let's catch up now with a technical view of what we could expect this year in 2023. As we go into the meat of December, Ron William from RW Advisory joins us now. JN: Ron, welcome. I want to take a look at what a Santa Claus rally is in just a minute. But let's just quickly ask you, first of all, to give us the set-up, the backdrop, where we are, what's happened. And as we go into December, what should we be looking for? Rally may be muted this year by Black Friday RW: Well, season's greetings, Jeremy, good to be back, engaging with eachother on markets in the UK. The Santa Claus rally is fact, just to give the headline answer first. And statistically, we'll take a look at how advantageous it can be to trade this from a tactical perspective. However, this year, market backdrop and behavioral and cycle indicators suggest that the Santa Claus rally will likely be muted because Santa is likely visited earlier this year in terms of the discounted Black Friday weekend that we just enjoyed. And so the best is likely already done. JN: OK, well, let's take a look at your first chart and we can get a better idea about what it is you're looking at. You've got here the global ranking model. As I say, this gives a little bit of a backdrop to what's happening in the short term, medium term and the longer term, a strategic view of the markets. Just talk us through what this is telling us and how we should interpret it. US enjoying a post interest-rate unwind RW: Yes, well, this is looking at the global cross asset ranking model. And as you just mentioned, from left to right, we have the strategic long term, tactical medium-term and active short-term trend filters. And what it shows is that there's been a broad tactical surge in risk proxies, notably world equities, Bitcoin and gold. And just to preface the last two, that's a little bit of risk on, but also risk off in terms of some of the geopolitical headwind that has taken place in recent weeks. Now, US equities has been led by growth stocks, but also year to date laggards. From an American perspective, this is post interest-rate unwind from that 5% historical level and the so-called Federal Reserve (Fed) silent pivot where it became less hawkish than the last year or so.
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