Surge In First-Time Buyers 'To Fall Away'

A report suggests the number of first-time buyers rose 45% in the year to July but the surge in transactions will slow as property prices rise.

The latest First Time Buyer Monitor from LSL Property Services shows that plunging mortgage rates - partly a result of Government schemes to boost lending - helped 26,100 step on to the property ladder in the month.

That was a rise of more than 8,000 on the same month in 2011 and the best performance since November 2007, the report said.

The figure was released on the day the Halifax House Price Index registered a 0.4% increase month-on-month in August, 5.4% year-on-year in the three months to August, and suggested housing costs would continue to climb gradually during 2013.

The LSL report highlighted the improving affordability of first-time buyer mortgages as the Funding for Lending Scheme (FLS) meant banks were able to pass on cheaper credit to borrowers.

Other initiatives such as NewBuy and Help to Buy have been aimed at giving people with smaller deposits a leg-up.

But the study also pointed to strong house price growth over the period, which LSL warned threaten to stall the growth in buyers.

It said the average purchase price for a first-time buyer rose 8% in the last year to £146,726 in July, with deposits now representing a far greater proportion of the income of a first-time buyer.

LSL put the figure at equal to 83.1% of annual income, up 5.0% on July last year.

David Newnes, director of LSL Property Services, said: "There is simply not enough housing stock to match continued demand.

"If supply fails to keep pace with demand the housing market will become increasingly unsustainable.

"Prices will rise sharply, and future first-time buyers will be left in the lurch."

He added: "There is a desperate need for further cheap property in order for the run of success to continue."

Recent data has revealed a strong increase in the construction of properties as firms build on the improving economic outlook but analysts say the progress amounts to little in terms of supply against high demand.

16.01 | 0 komentar | Read More

US Job Stats Drive Market Stimulus 'Frenzy'

Stock markets endured a rollercoaster after the release of US employment figures - a crucial indicator on when the Federal Reserve will ease its economic stimulus.

US employers added 169,000 jobs in August and much fewer in July than previously thought, according to the official data.

The slowdown in hiring was initially seen as complicating the Federal Reserve's decision this month on whether to start slowing its monthly $85bn of bond purchases to boost the economy.

Fears over the so-called 'tapering' of asset purchases has gripped financial markets for months, reflecting the addiction to cheap credit in the world.

The Dow Jones industrial average rose on opening - alongside the FTSE 100 and other major European markets - but then fell back, closing with little change.

However the yield on the 10-year US Treasury note fell to 2.87% from 2.95% as investor expectations eased about the prospect of rising central bank interest rates.

The UK's 10 year debt yield - the interest rate the country pays to service its debts - also fell back from a two-year high to below 3%.

The US Labor Department said while the unemployment rate dropped to 7.3% in August, the lowest in nearly five years, it fell because more Americans stopped looking for work and were no longer counted as unemployed.

The proportion of Americans working or looking for work fell to its lowest level in 35 years.

July's job gains were just 104,000, the fewest in more than a year and down from the previous estimate of 162,000.

Employers have added an average of 148,000 jobs in the past three months, well below the 12-month average of 184,000.

Market strategist at ETX Capital Ishaq Siddiqi said: "It's unwise to say tapering is off the cards in September but it definitely has given the Fed and the market food for thought."

Meanwhile, US oil prices closed at a two-year high of $110.53 a barrel amid fears of escalating tensions in the Middle East and hope for continued stimulus from the Fed. 

16.01 | 0 komentar | Read More

Royal Mail To Pledge City Dividend Bonanza

By Mark Kleinman, City Editor

Royal Mail will pledge to pay hundreds of millions of pounds in dividends to City shareholders in an attempt to win private sector support for its £3bn privatisation, Sky News has learnt.

The company will make the promise as part of a Government statement announcing its intention to float the centuries-old postal operator on the London Stock Exchange, which is expected to be made towards the end of next week.

Sources close to the planned listing of Royal Mail said on Friday that the company was likely to commit to a specific shareholder payout for the current financial year, as well as a general intention to distribute up to about 50% of its profits in the form of dividends in subsequent years.

A valuation of £2.5bn - £3bn would see employees' stake worth up to £300m

The details are still being finalised and could yet change ahead of an announcement, one insider said.

Royal Mail's board is understood to have backed the dividend pledge in principle and is expected to meet next Wednesday to agree further details relating to the privatisation.

The dividend pledge is designed to reassure major City institutions about the attractiveness of Royal Mail as an investment proposition at a time when the threat of industrial action has again reared its head.

Postal operators in other European markets tend to pay out at least 40% of their earnings in dividends although Royal Mail would be expected to retain a large chunk of its future profits as it continues to invest in the modernisation of the company.

The share giveaway to staff will encompass 10% of Royal Mail's equity

"There will be an explicit and robust statement on the company's dividend policy, as you would expect," said a person close to Royal Mail.

However, the commitment on dividend payouts may also ignite further hostility from unions which have criticised the sell-off plans and accused ministers of transferring Royal Mail's economic value to the private sector while having nationalised its historic pension liabilities.

The Communication Workers Union (CWU) is preparing to hold a vote on national strikes at Royal Mail, saying it believed industrial action was "inevitable" without compromise from the company on issues including pay, jobs, pensions and the impact of any sell-off.

The Communication Workers Union is preparing to vote on national strikes

The union has been lobbying for a ten-year pay and conditions offer that would be underwritten by the Government.

The result of the ballot will be revealed in early October and the first strike could be held on October 10 if there is a vote in favour of industrial action.

A lack of progress settling the row could potentially lead to a dispute spilling into the festive season, Royal Mail's most profitable and crucial trading period.

The conflict has escalated despite a commitment made in July by Vince Cable, the Business Secretary, to hand 150,000 Royal Mail employees free shares in the company likely to be worth roughly £2,000-per-worker.

As a further sweetener, staff will be guaranteed a proportion of the retail element of the initial public offering (IPO).

Strikes could be held in October if employees vote for industrial action

The share giveaway to staff will encompass 10% of Royal Mail's equity, in accordance with the Postal Services Act that paved the way for the sell-off of the company two years ago.

At an overall valuation of between £2.5bn and £3bn, that would value the employees' stake at up to £300m.

Members of the public will also be able to buy shares in Royal Mail through intermediaries, a website and in Post Office branches.

Royal Mail and the Department for Business, Innovation and Skills both declined to comment, although one source said an announcement about the flotation could yet be delayed depending on external factors.

The Government has vowed that the threat of a strike will not deter it from selling shares during the current financial year.

16.01 | 0 komentar | Read More

Surge In First-Time Buyers 'To Fall Away'

A report suggests the number of first-time buyers rose 45% in the year to July but the surge in transactions will slow as property prices rise.

The latest First Time Buyer Monitor from LSL Property Services shows that plunging mortgage rates - partly a result of Government schemes to boost lending - helped 26,100 step on to the property ladder in the month.

That was a rise of more than 8,000 on the same month in 2011 and the best performance since November 2007, the report said.

The figure was released on the day the Halifax House Price Index registered a 0.4% increase month-on-month in August, 5.4% year-on-year in the three months to August, and suggested housing costs would continue to climb gradually during 2013.

The LSL report highlighted the improving affordability of first-time buyer mortgages as the Funding for Lending Scheme (FLS) meant banks were able to pass on cheaper credit to borrowers.

Other initiatives such as NewBuy and Help to Buy have been aimed at giving people with smaller deposits a leg-up.

But the study also pointed to strong house price growth over the period, which LSL warned threaten to stall the growth in buyers.

It said the average purchase price for a first-time buyer rose 8% in the last year to £146,726 in July, with deposits now representing a far greater proportion of the income of a first-time buyer.

LSL put the figure at equal to 83.1% of annual income, up 5.0% on July last year.

David Newnes, director of LSL Property Services, said: "There is simply not enough housing stock to match continued demand.

"If supply fails to keep pace with demand the housing market will become increasingly unsustainable.

"Prices will rise sharply, and future first-time buyers will be left in the lurch."

He added: "There is a desperate need for further cheap property in order for the run of success to continue."

Recent data has revealed a strong increase in the construction of properties as firms build on the improving economic outlook but analysts say the progress amounts to little in terms of supply against high demand.

16.01 | 0 komentar | Read More

Snowden: NSA And GCHQ Crack Encyption Codes

US and British intelligence agencies have unlocked much of the online encryption that protects the privacy of internet users' personal data, online transactions and emails.

Many internet users assume that their online information, including medical records and bank details, is safe from snoopers but fresh documents released by US whistleblower Edward Snowden appear to show otherwise.

Classified briefings between the National Security Agency and its UK counterpart GCHQ, obtained by The Guardian newspaper, show the agencies celebrating their success at "defeating network security and privacy".

A 2010 GCHQ document states: "For the past decade, NSA has lead an aggressive, multi-pronged effort to break widely used internet encryption technologies.

"Vast amounts of encrypted internet data which have up till now been discarded are now exploitable."

Whistleblower Edward Snowden handed the documents to the Guardian

The documents reveal various covert methods have been used to break down internet security, including a NSA programme, costing $250m (£160m) a year, which works with technology companies and internet service providers to insert weaknesses into their product designs.

Supercomputers have also been used to break encryption with "brute force" and in some cases companies say they were forced by the government to hand over their master encryption keys or build in a back door.

For at least three years, one document says, GCHQ has been working to develop ways into protected traffic on the "big four" service providers, named as Hotmail, Google, Yahoo and Facebook.

By 2012, GCHQ had developed "new access opportunities" into Google's systems, according to the document, which Google has denied.

Through these covert partnerships, the agencies have inserted secret vulnerabilities - known as backdoors or trapdoors - into commercial encryption software.

The agencies defend code-breaking saying it is necessary to counter terrorism and gather foreign intelligence.

But security experts say the internet is being undermined as "cryptography forms the basis of trust online".

GCHQ and the NSA says code-breaking is necessary to prevent terrorism

Bruce Schneier, an encryption specialist at Harvard's Berkman Center for Internet and Society, told The Guardian: "By deliberately undermining online security in a short-sighted effort to eavesdrop, the NSA is undermining the very fabric of the internet."

The documents are among more than 50,000 shared by The Guardian with The New York Times and ProPublica, the non-profit news organisation.

The full extent of the NSA's decoding capabilities is known only to a limited group of top analysts from the NSA and its counterparts in Britain, Canada, Australia and New Zealand.

Only they are cleared for the Bullrun encryption-cracking programme, the successor to one called Manassas - both names of an American Civil War battle.

A parallel GCHQ counter-encryption programme is called Edgehill, named for the first battle of the English Civil War of the 17th century.

16.01 | 0 komentar | Read More

Royal Mail To Recruit 21,000 Staff For Xmas

Royal Mail is to recruit more than 21,000 seasonal staff to help sort the Christmas post.

The company estimated 18,000 of the posts will be in England, 2,000 in Scotland, 700 in Wales and 400 in Northern Ireland.

The temporary jobs would be available between early November and January 2014 and support Royal Mail's permanent 124,000 postmen and women who sort and deliver the mail all year round.

Royal Mail's managing director of operations and modernisation, Mark Higson,said: "Christmas is the busiest time of the year for Royal Mail and we plan all year round to help ensure we deliver the best possible service to our customers.

"Every Christmas, we make a substantial financial commitment in additional resources to handle the festive mailbag, including the recruitment of thousands of temporary workers."

The annual drive for festive posties is held against a backdrop of unrest in the ranks, as the Communication Workers Union (CWU) prepares a vote on national strikes over the Government's plans to privatise the Royal Mail.

The CWU, which announced the ballot on Monday, said it believed industrial action was "inevitable" without compromise from the company on issues including pay, jobs, pensions and the impact of any sell-off.

The result of the ballot will be revealed in early October and the first strike could be held on October 10 if there is a yes vote.

A lack of progress on settling the row could potentially lead to a protracted dispute spilling over into the festive season, Royal Mail's most profitable period.

The union's move is a major challenge to the planned privatisation, which ministers are expected to press ahead with in the coming months that would see staff secure free shares worth an estimated £2,000 each.

The CWU says the arrangement offers its members little in terms of guarantees over their future.

16.01 | 0 komentar | Read More

Ryanair To Cut Flights Amid Profit Turbulence

Ryanair is to reduce flying schedules this winter after seeing its profit hopes dented by growing headwinds including weaker summer demand.

Shares in the no-frills carrier plunged by 14% soon after it issued the profit warning, just a month after chief executive Michael O'Leary had said that the heatwave in northern Europe in July had put people off travelling abroad to seek summer sunshine.

The airline said on Wednesday that a weaker pound, increased competition and Europe's continued economic problems were also having an impact on fares and the amount of money it makes per passenger.

Michael O'Leary wants to cut costs

It planned to respond to its weaker outlook by selectively reducing its winter season capacity and rolling out lower fares and "aggressive" seat promotions in markets including the UK.

The strategy will cut its annual traffic forecast by 500,000 to 81 million while profits will be at the lower end of its previous forecast of between £483m and £508m.

The announcement prompted share slides across the airline sector in early trading, with rival easyJet losing 7%.

Thomson Holidays owner TUI Travel and British Airways parent firm International Airlines Group were both 4% lower.

Airlines across Europe have been struggling with weak economies, high fuel prices and costly fleet upgrades.

Ryanair announced in July that it was raising charges for hold baggage as part of its campaign to eradicate the suitcase from its flights in a bid to save costs.

16.01 | 0 komentar | Read More

Ex Co-Op Bank Boss Refuses Blame For Losses

The former boss of the Co-operative Bank and Britannia Building Society has told MPs he foresaw the "disastrous" failure of Co-Op to buy Lloyds branches.

Speaking to the Treasury Select Committee, Neville Richardson's evidence highlighted the financial problems behind the Co-op's failed plan to buy 632 Lloyds branches, known as Project Verde.

Mr Richardson said: "I have to say quite unequivocally that if I had known that Verde was going to be as all-consuming as it became I would not have been for it all.

"Because the disastrous consequences I warned of with the other programmes and Verde coming down the line were just being multiplied by Verde and the distraction Verde was creating."

The Co-operative bank announced a £709m pre-tax loss in the first half of the year and the group said there will be "no quick fixes" as it embarks on a four-year turnaround plan.

The group hopes to partly fill a £1.5bn hole in its cash reserves by raising £500m from its own bondholders.

Lloyds chief executive Antonio Horta-Osorio speaks to Sky's Jeff Randall

Mark Taber, who runs the Co-operative Action Group, an organisation made up of bondholders who are contesting the restructuring plans which could see them lose up to 60% of their investment told Sky's Jeff Randall: "The Co-op promised 12 weeks ago that they were conscious of the different interests and would look at alternative proposals and also pay for financial advice for them.

"We were promised they'd speak to us when these results come out, now they're saying they won't. It seems as if the Co-op group is trying to railroad people into a proposal. It's a very dangerous strategy."

Andrew Tyrie MP, who chairs the select committee, said: "There appears to be a yawning gulf between the evidence the Committee heard ... from Mr Richardson and the evidence we heard previously from Mr (Andrew) Bailey. The committee will be investigating this a good deal further."

In a rare broadcast interview with Sky's Jeff Randall, the chief executive of Lloyds banking group, Antonio Horta-Osorio, defended his company's due diligence procedure over the proposed sale.

He said: "We checked their finances and (those of) everybody in the market. If you look at the Co-operative group bonds which reflect the risk of the Co-operative group, until February of this year the risk was considered by the market to be as good as the average of the UK banks."

Lloyds, which is being forced to dispose of the branches as a condition of its bailout, confirmed in July that the branches would be re-branded as TSB Bank.

It is seeking an extension from the European Commission to dispose of them via an initial public offering.

16.01 | 0 komentar | Read More

UK Car Registrations Continue Surge In August

The UK car market grew by almost 11% in in August, the Society of Motor Manufacturers and Traders (SMMT) has said, continuing an 18-month streak of rises.

65,937 new cars were registered in the UK in August, up 10.9% on July, SMMT figures showed. 

The news will be welcomed by economists and government ministers looking for evidence that the UK is emerging from the financial crisis. 

The best selling cars in the UK in 2013 were the Ford Fiesta (75,413), the Ford Focus (57,129) and the Vauxhall Corsa (53,284), the figures showed.  

Mike Hawes, SMMT Chief Executive, said: "UK new cars registrations have now risen consecutively for a year and a half.

"Private fleet buyers are clearly capitalising on attractive deals and new technologies against a backdrop of increasing economic confidence. 

"Ahead of the September plate change, August always has far fewer registrations, but the 10.9% rise this month bodes well."

The figures showed that some 1,391,788 cars had been registered in the UK in the year to date. 

The car manufacturing industry has been hit hard by the financial crisis.

In October 2012, car manufacturer Ford laid off some 4,300 workers across Europe - 1,400 in the UK - as it sought to cut costs in the face of weakening demand for vehicles. 

Related stories: 

16.01 | 0 komentar | Read More

Banks Pay Up Over Rate Swap Mis-Selling

The Financial Conduct Authority (FCA) has confirmed an acceleration in the number of companies being compensated for the mis-selling of interest rate swaps.

The regulator announced that banks had paid out £500,000 to date but said the figure was set to rise rapidly.

The bill is the latest faced by banks, which are also compensating customers for mis-sold payment protection insurance (PPI).

Two British banks have also been fined for manipulating the London Interbank Offered Rate, or Libor market benchmark.

Interest rate swaps, investigated by Sky News, were designed to protect smaller companies against rising interest rates but when rates fell, they had to pay large bills, typically running to tens of thousands of pounds.

In its first update on how banks are responding to claims, the FCA said that by the end of August 10 offers of redress had been accepted by businesses totalling £0.5m.

The FCA said another 210 offers of redress were with customers and a further 1,700 were due to be sent shortly.

Barclays had reached the redress offer and acceptance stage for 92 sales, with 68 at HSBC, 13 at Lloyds and 20 at RBS.

The banks have taken on 2,800 staff to review more than 30,000 cases and the FCA expects most customers will be told by the end of the year about the result of their review.

More than 25,000 sales or 85% of the total are being assessed.

FCA chief executive Martin Wheatley said: "With 85% of cases now under review, banks have made progress.

"But like the thousands of affected small businesses, we want to see redress paid quickly to those who have suffered loss as the result of mis-selling."

16.01 | 0 komentar | Read More