Boris – Cummings big spend budget on the horizon? FTSE unsettled by reshuffle

Jamie Gordon
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Boris – Cummings big spend budget on the horizon? FTSE unsettled by reshuffle
Sterling rallied following the resignation of Chancellor Sajid Javid, while FTSE early morning wobbles were compounded by a seismic cabinet reshuffle. The assumption now, it would appear, is that incoming Chancellor Rishi Sunak will be bullied into big spending in next month’s budget, by Boris Johnson and crony Dominic Cummings. Among a growing list of promises, the PM has pledged £5 billion towards bus services and cycle routes, alongside a HS2 budget now touching three times its original estimate. While the prospect of a more harmonious cabinet – and more generous infrastructure spending – buoyed Sterling, FTSE was further unsettled by the severity of the reshuffle. However, what began the index’s bad start were the worrying stories coming out of Hubei, regarding the Coronavirus. Doubts will persist over the market’s recent attempts to find positive news to chase – the next round of Coronavirus updates will likely set the tone for market sentiment over the coming week. Speaking on Boris Johnson’s reshuffle and movements in equities, Spreadex Financial Analyst Connor Campbell, commented,

“Already rough due to an unexpected surge in the coronavirus death toll, Thursday became a bit of a nightmare for the FTSE thanks to Boris Johnson’s cabinet reshuffle.”

“Unwilling to sack all of his advisors as dictated by Johnson and puppet master Dominic Cummings, Saijid Javid resigned as Chancellor, in doing so becoming the shortest-serving minister to hold that office for more than 50-years.”

“Initially the pound had a bit of a wobble following the announcement. However, the fact Rishi Sunak – perceived to lack the same power base as Javid – was revealed as his replacement generated speculation the UK could be in for a Johnson/Cummings-influenced, spend-heavy budget next month.”

“That in turn caused sterling to surge 0.7% against the dollar, taking cable to a 10-day peak of $1.3047, and 0.9% against the euro, leaving it at a 2-month high of €1.2038.”

“Ever angry at the pound’s ascent, the under-pressure FTSE sank 1.6%. Effectively wiping out the week’s gains, the UK index is back at 7420 – an extra blow since it already missed out on the record peak partying of its German and US peers.”

“Not that there was much green to be found anyway this Thursday. The spike in coronavirus deaths and new cases cast doubt over the market’s recent highs, sending the DAX and CAC down 0.3% and 0.5% respectively.”

Responding to the uncertainty, oil took a big knock and added to the FTSE’s woes. Among the biggest losers were Royal Dutch Shell (LON:RDSB), down 3.65%, and BP (LON:BP), which fell 3.09%.

Tesla share price – shorters’ winning ticket or widow-maker?

Jamie Gordon
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Tesla share price – shorters’ winning ticket or widow-maker?
Its been a strange sort of year for Tesla (NASDAQ:TSLA) and its shareholders. The American automotive and energy company, run by zany engineer and personality Elon Musk, went from being questioned on its financial viability throughout the first half of 2019, to watching its share price bounce from US $176.90 per share (on June the 3rd 2019) to $968.99 per share (on the 4th of February 2020). It now sits at $750.93 a share, down 2.19% during trading so far, and claiming the top spot as Scottish Mortgage Trust’s largest holding. But, what have been the cause of its rise?

Improving the business while keeping its hold on the electric car market

The company delivered its more affordable Model 3 car during 2019, and this marked a turning point in its fortunes. It posted consecutive periods of profit during the second half and in the fourth quarter, it generated $1 billion in cash after capital expenditures.

Despite posting its typical full-year loss, the Group’s operating costs were down 7%, while sales were up 13% and deliveries bounced 50%.

Analysts have added that with its Shanghai factory providing a source for optimism, and a new factory under construction in Europe, the company look set for expansion on the global stage.

Speaking on its outlook, Chokshi and Eavis of the NY Times stated:

“The company has a lock on the small, but growing battery electric vehicle market — and the bulls believe Tesla’s not about to lose it. In a note over the weekend, ARK, an investment management firm, said it expected Tesla’s share price to soar to $7,000 in five years based on a belief that Tesla can increase profits, decrease costs and build a fully autonomous taxi network. Even less-exuberant analysts say the company has proved itself.”

Carbon credit cash looking electric for Tesla

While not a huge part of the company’s $24.57 billion revenue in 2019, Tesla has made $2 billion in revenue by selling ZEV credits since 2010. The EPA say that only 3 car manufacturers currently stick within their carbon emission target without using credits, and it is on record that GM (NYSE:GM) and Fiat (BIT:FCA) have both bought Zero Emissions Vehicle credits from Tesla. While the ZEV credits expire in 2021, the company will continue to look to make money by capitalising on tax reliefs and credits based on its environmentally-friendly status, not only in the US, but also across the world.

Breaking through $100 billion

A symbolic moment in the company’s change of fortunes was the moment it broke through to a valuation of $102 billion (or £76.1 billion) at the end of January. The breakthrough saw Elon Musk collect a pay cheque of $2.6 billion, alongside the successful fulfilment of other financial performance conditions. It also saw Tesla break through into the number two spot, as the world’s second largest car company, behind Toyota (LON:TYT) but overtaking Volkswagen AG (ETR:VOW3). The question remains, though, as a popularly shorted stock by bearish Wall Street pundits, is it worth a shot?

Tesla shares – shorters’ dream or dud?

Despite the company’s shares bouncing 350% in the last six months, there are still those who believe the Tesla share rally will die a death. At one end of the spectrum, we have the shorters who are now licking their wounds. Seasoned short-seller, Robert Majteles, told the Wall Street Journal of his failed short attempt on Tesla stock: “Oh damn I got my butt kicked.” “It’s the biggest set of losses that I’ve ever taken in 20 years” Amy Wu Silverman, a managing director at RBC Capital Markets, added:
“Tesla is my widowmaker”
In the middle ground, many are advising onlookers to stay put, and stockholders to sell up. The WSJ report some 45% of analysts have either an ‘Underweight’ or ‘Sell’ stance on the company’s stance, which represents the highest proportion of Tesla bears to-date. On the far end of the spectrum, the most hard-headed shorters are telling us to bet against Tesla with everything we have, despite the Company forecasting a year of expansion. Attributing Tesla’s success to optimism surrounding its trading turnaround and credit sales, renowned shorter Jim Chanos stated, “This is a car company, yes a higher-end one, but it’s still a car company, with the same low margins of other auto makers.” So, what do we think? We can be sure that one thing we’re not short of is opinions on the future of Tesla stock. One thing we ARE short of is useful information to guide our actions. The stock’s valuation prices in more growth, which is neither guaranteed nor impossible. Ultimately, my approach is one of sitting on the fence. If you’re holding Tesla stock – well done. You’re part of a disruptive company who have seen a turnaround in their performance. Keep a grip on your holding while the business is meeting your expectations. If you don’t currently hold Tesla stock, hold tight. The price is currently far higher than it could end up. With it being a disruptive company, led by such a whacky egotist/genius, there will be a low point down the road. Save yourself for that opportunity. On Thursday, Tesla announced it would raise $2 billion through a stock offering, while Elon Musk boasted about the launch of the company’s sleek-looking solar roof.

How Donald Trump’s impeachment has helped his 2020 election campaign

Ishen Patel
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How Donald Trump’s impeachment has helped his 2020 election campaign
‘Donald Trump is being impeached’, these are words that hit global news headlines back in December. The US President has seen a pretty hectic time of things over the last few weeks, and hectic seems to be an understatement. In December when the headlines broke out, no one would have thought that the impeachment process would have actually benefited Trump, but from today’s report it seems that it has rallied his 2020 election campaign. Analysts and campaign fundraisers in the United States found out that the impeachment trial led to Donald Trump raising an extra $60 million to fund his campaign activity. This could have already been predicted from the moment that the US President was going through the initial impeachment procedure. Trump would have been the third US President to be successfully impeached, however Republican support in both chambers of Congress had other ideas. Such is the partisan nature of the US legislature that even though Trump does not have full support of his own party, Republicans are still not willing to host a Democratic president. “The Democrats’ shameful impeachment hoax and dumpster fire primary process have only contributed” to the financial support for Trump’s re-election, said Brad Parscale, the president’s campaign manager, said in a statement, according to Reuters. The campaign brought in an extra $60 million, which means that Trump’s 2020 campaign now has $200 million in cash on hand, a substantial figure. US Elections are based on the premise that money buys power. The role of PAC’s and Super PAC’s allows money to influence the nature of legislation and the significant impact of lobbyists in a Presidential election may give Trump the high hand. The website Open Secrets found that Trump’s campaign committee and outside groups had raised $232.09 million as of Feb. 3, based on Federal Elections Commission data. The US election is coming to an interesting time, with the primaries and caucuses now taking place to determine who will be the front runner to contest against Donald Trump. Bernie Sanders recently won the New Hampshire primary on Tuesday, and bookmakers are not underestimating his ability to take Trump to the final hurdle. Despite the recent win for Sanders, the Democratic Party and Trump need to remember that the US Election is a marathon not a sprint.

Hurricane Energy continues it’s share price decline

Ishen Patel
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Hurricane Energy continues it’s share price decline
Hurricane Energy (LON:HUR) have seen a general downward trajectory in the price of their shares over the last few months. In what seems to be an explained trend for Hurricane Energy, even the CEO cannot comprehend as to why shares have slipped into red over the recent few weeks of trading. A company, which was pipped for big things by analysts and traders, is going through a tricky time despite producing some impressive results. The Chief Executive of Hurricane, Robert Trice commented: “We note the recent weakness in the Company’s share price and I can confirm that we are not aware of any subsurface, operational or commercial reasons that would have caused such decline. The production performance of the Lancaster EPS wells is above our base case expectations and we remain on target to provide an update at the Capital Markets Day in March whilst continuing to make progress towards the next operational steps for our portfolio. “Hurricane remains focussed on delivering operational progress, on budget and on schedule, and, in so doing, delivering returns to shareholders. We look forward to continuing to update the market with quarterly production figures, and will announce any material variations to expectations as required.”

Hurricane’s recent results

In December, the firm told the market they had made a new discovery at its Warwick West well in the North Sea. Hurricane added that further analysis would be recorded and observed in order to deduce the sustainability of the discoveries. The Warwick West well, third and final well in the 2019 Greater Warwick Area programme, was spudded September 24 and drilled to 1,879 metres, intersecting a 931 metre horizontal section of a fractured basement reservoir. Hurricane owns 50% off the Warwick site, located in the Greater Warwick Area offshore. The other 50% is held by joint partner Spirit Energy Ltd. Hurricane also noted in December that average production would be in line with fourth quarter guidance of 11,000 barrels of oil per day.

Strong January production

At the end of January, Hurricane once again updated the market on their activity. This led to shares jumping over 14%. In their fourth quarter, Hurricane production was not as strong as the previous quarter due to commissioning activity. Notably, the firm still produced 11,800 barrels of oil per day versus guidance of 11,000 barrels per day. The higher levels of production helped Hurricane generate revenue of $170 million in the year ending December 31st, which the firm said would be reinvested into production and facilities.

Crystal Amber Fund

Crystal Amber are an AIM Listed fund which have major stakes in Hurricane Energy. Crystal Amber holdings have fluctuated between 5.1% and 4.8% over the last year and Hurricane Energy’s share price drop has also seen the value of Crystal Amber shares decline. Shares in Hurricane Energy currently trade at 15p (-2.88%). 13/2/20 14:51BST. The firm has seen a 52 week high of 64.5p and a low of 14.5p. The 50 day moving average of Hurricane is 25.87p whilst 200 day moving average is 37.37p.

Grainger intend to raise £185 million to fund acquisitions and new projects

Ishen Patel
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0
Grainger intend to raise £185 million to fund acquisitions and new projects
Grainger PLC (LON:GRI) have told shareholders that they intend to raise £185 million to fund company expansion. The residential property firm said that the funds raised would allow the firm to pursue new acquisitions and develop projects currently in the planning and legal phase. Grainger said that they expect to place 61.2 million new ordinary shares through an accelerated book build. The firm has yet to fully disclose the price of these additional shares and formalities have not been revealed. The share placing will also happen alongside a £120 million debt financing, which is estimated to raise aggregate funds of £305 million for the firm. Helen Gordon, Chief Executive commented: “We have real momentum in the business and now is the right time to invest for the future and increase our investment in our secured pipeline. Over the last four years, we have transformed Grainger into the UK’s leading provider of private rental homes, with c.9,000 operational rental homes and an attractive and growing pipeline of opportunities for over 9,000 more new private rental homes. Today’s placing will enable us to bring forward £246 million of investment for four new schemes, three of which are in strong regional cities, delivering 1,160 new homes, as well as expand our planning and legal pipeline, accelerating the delivery of net rental income and earnings growth.” The UK property market is looking to bounce back from previous setbacks. Both Brexit and wider political complications have taken their toll on the property market, however some clearance has been given. Following this, Grainger have remained confident to now captivate a recovering property market and accelerate their growth through new acquisitions and organic growth. Gordon concluded: “The outlook for the UK’s private rented sector is positive, with growing customer demand and structural undersupply supporting the investment case. With our deep knowledge and experience in the market, we are able to deliver long-term, sustainable returns through our targeted investment strategy, coupled with our strong operational platform.” “Grainger’s integrated owner-operator business model delivers enhanced returns at scale, and today’s placing will allow us to further grow our business in high-quality rental homes and deliver great service to our customers, which in turn will drive long-term shareholder value.”

Grainger’s business in Wales

In December, Grainger announced that they had completed an acquisition deal in Wales. Grainger alluded to the new acquisition of a capital quarter in Cardiff Wales for a reported £57 million. The terms agreed include a forward funding and the acquisition of a 307 home project in the capital of Wales. Grainger alluded to the growing nature of the Welsh property market due to its strong economic prospects and growth potential. The home is currently being developed by IM Properties, with Winvic Construction Ltd acting as contractor. Grainger said it expects this investment to generate a gross yield on cost approaching 7% once stabilised, with completion anticipated in mid-2022.

Strong performance within private rental sector

A fortnight ago, Grainger updated the market by praising their private rental sector growth. The firm praised the strong performance of its private rented sector portfolio, at a time where the property market has been hit by external shocks and political complications. In the four month period, which ended on January 31 Grainger said that overall like-for-like rental growth was 3.5%, with a 3.0% rise on a like-for-like basis on the residential landlord’s PRS homes. The property investment firm said that its private rental sector had continued to perform well, with occupancy at 97.5% and a strong sales performance in the period, with pricing 0.8% ahead of valuations. Grainger’s PRS development pipeline as at January 31 stands at 24 schemes, representing 9,104 homes and around £2.00 billion in investment, an impressive stat for shareholders to note within today’s update. From the total portfolio, £845 million is related to internal company investment, £600 million from a joint venture deal with Transport for London and £570 million from opportunities in the planning and legal stages. Shares in Grainger trade at 312p (+0.13%). 13/2/20 15:13BST.

Filta shares rally over 19% on strong European and North American trading

Ishen Patel
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0
Filta shares rally over 19% on strong European and North American trading
Filta Group Holdings PLC (LON:FLTA) have seen their shares rally 19% following strong expectations from the firm. The firm said that they expect to deliver a better performance in 2020, following progress made in the final quarter of 2019. Filta Group Holdings plc is a provider of fryer management and other services to commercial kitchens. Shares in Filta trade at 167p (+19.29%). 13/2/20 12:57BST. The company remained confident in their expectations, as they forecasted to report adjusted earnings before interest, tax, depreciation and amortization of £3.2 million on turnover of approximately £25 million. Filta praised the strong performance of the North American and European business sectors. Both these divisions delivered results in line with expectations. Notably, the UK company too actions to deliver costs savings of around £100,000 per month. Filta told shareholders that they made strong progress in the final quarter of 2019, with “strong interest” from potential business in North America. Jason Sayers, Chief Executive Officer, commented: “The acquisition of Watbio in December 2018 was a significant transaction for the Group, given that it is a well-established company with a high-quality customer base and was almost twice the size of Filta’s existing UK business. The rationale and opportunities presented by the acquisition remain compelling but, as previously reported, we did encounter some challenges in 2019 as we sought to integrate Watbio with our existing FOG and Seal business. However, following a number of management changes, new hires and investment in software systems, it is pleasing to report that these difficulties have now been addressed, and we look forward to delivering the higher margins of which we know the business is capable. At the same time, Filta’s North America business continues to grow through our focus on helping franchisees to improve and expand their own operations, which is increasing the level of reoccurring royalty revenues flowing to the Company”.

Filta’s second half expectations

In November, the firm gave a confident update to shareholders. The filtration-focused engineering firm expected adjusted earnings before interest, taxes, depreciation & amortisation to be “similar” to the £1.7 million reported for the first six months of the year. Filta alluded to the fact that order books continued to remain strong, and new franchisees continue to show interest and the firm remains confident of delivering further growth. Management decided to divert resources to catch up on an order backlog in its UK Fat, Oils & Grease unit. In addition, a small installation operation is also expected to be delayed, until early 2020. Filta have seen an excellent update today, and the firm should hope that shareholders can remain optimistic for future trading.

Can Lloyds Banking shares hit 70 pence?

Ishen Patel
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Can Lloyds Banking shares hit 70 pence?
Lloyd’s Banking Group PLC (LON:LLOY) have seen an interesting few weeks, as the shares faced a setback since the December election, where shares initially rallied. Shares in Lloyds Bank trade at 57p (-0.44%). 13/2/20 12:26BST. The share price of Lloyds has hovered around the late 50p and early 60p ball park over the last few months, however is yet to hit 70p. The 52 week high has hit 73.66p, but has also seen lows of 48.16p showing its volatile nature. Combined with this, the 50 day moving average has flirted with the 60p but has just remained shy at 59.53p. Whilst the 200 day moving average has been slightly lower at 56.75p. Could Lloyds shares hit 70p?

Lloyd’s face tough media scrutiny

Lloyds have been put in bad media spot light over the last few weeks, and this has hindered the upwards movement of its price. In December, the British bank was faced with much public scrutiny as it failed the Bank of England Stress Test. Lloyds initially did pass the Bank of Englands annual assessment in the balance sheet department. However, plans to double a 100 basis point capital buffer designed to protect lenders in depressed economic conditions could put both bank’s 2020 share buyback plans in jeopardy, analysts said. In addition to this, Lloyds also received criticism for mistreating victims of major fraud. The fraud at Halifax Bank of Scotland’s Reading branch led to six people being jailed in 2017 for a combined 47 years. The scam involved small business customers being referred to consultancy for bribes which included watches, holidays and sex with prostitutes. The bank’s compensation scheme for victims had ‘serious shortcomings’, retired judge Ross Cranston said in a review. The bank has paid £102 million in compensation to 71 businesses and 191 directors over the fraud. Additionally Lloyds said it would offer all victims the option to have their cases independently reviewed. The Financial Conduct Authority said it would consider ‘further action’ against Lloyds over the failings, adding that they needed to be addressed quickly. Certainly, Lloyds will have to face their public image issues if they are to fill their shareholders with any confidence.

Third Quarter slump

Aside from the bad news coverage, Lloyds have also seen their profits and performance slump over the last few months. At the end of October, the firm reported a a 97% fall in pre-tax profit for the third quarter from last year. The company’s profit before tax for the third quarter fell 97 percent to £50 million from £1.82 billion last year. Statutory loss after tax for the quarter was £238 million or 0.5p per share, compared to profit of £1.42 billion or 1.8p per share in 2018. The third quarter results, received a bruising from a £1.8 billion payment protection insurance or PPI charge, driven by a high levels of PPI information requests received in August. Additionally, net income for the quarter declined 6% to £4.19 billion from £4.45 billion pounds a year ago. The earnings of Lloyds have been bruised, as Brexit complications and political landscape of the United Kingdom weigh down on not just Lloyds but all British banks. Credit Suisse issued a target of 60p for Lloyds on 11/2/20, whilst Jefferies International took a more bullish stance recommending a buy rating with a 78p target on 22/1/20. One thing that Lloyds can fix however is their reputation within the market, and the firm will have to bounce back from a tough few months of trading if shares are to be lifted in excess of 60p.

MJ Gleeson see falling interim revenue from slow Strategic Land division

Ishen Patel
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0
MJ Gleeson see falling interim revenue from slow Strategic Land division
MJ Gleeson (LON:GLE) have reported a fall in interim revenue on Thursday but have remained confident to meet internal expectations. The land development firm left its full year expectations unchanged, however a decline in revenue may concern shareholders. In the six month period, which ended on December 31 the firm saw its revenue drop 19% to £105 million from £118.3 million on year go. Additionally, pretax profit also crashed 40% from £22.3 million to £13.3 million. MJ Gleeson said that its Strategic Land division hampered results, and this sector recorded no revenue in the half. However, in the year prior it generated £30.3 million. The urban generator also said that a number of land sales, which were expected to be closed in the first half are now estimated to be closed in the second half. Following the December election and progress within Brexit negations, the firm added that greater certainty had surfaced the market. In their homes division, Gleeson said that revenue rose 14% during the firs half to £15.9 million from £14 million a year ago. On a better note, this sectors saw sales rise 17% to 811 units from 691 units. Shareholders would have been further impressed, as the firm increased its first half dividend by 4.3% to 12 pence per share. Dermot Gleeson, Chairman commented: “We are delighted with the performance of our Homes division, with completions up 17.4% at 811 units. Demand remains strong, with January reservations per site up 5% on last year. We see no signs of this abating. Land remains available at sensible prices and we will be opening a significant number of new sites shortly. “As previously announced, Strategic Land, which saw an exceptionally strong result for the comparator period, did not complete any sales in the first half. However, the anticipated deal flow in the second half is now materialising with three sites sold, of which one was sold unconditionally and legally completed in January. We have a substantial pipeline in place and demand for consented sites, from both large and medium-sized developers, remains very high. “The strong performance of Gleeson Homes and anticipated deal flow in Strategic Land for the second half underpin the Board’s confidence that the Group’s results for the full year will be in line with expectations.”

Gleeson’s January update

The firm saw its shares in red in January, however remained confident to deliver expectations. The land developer said that its Homes unit had sold 811 units during the half year period to end 2019, which saw a 17% climb year on year from the 691 figure. Additionally, Gleeson said that the demand for its low cost homes remains strong and is on track to deliver full-year unit completions in line with expectations. In its Strategic Land division, the company said that due to a number of land sales which will be closed in the first half, these have shifted to the second half For financial 2019, the firm reported pretax profit of £41.2 million, which showed growth by 11% from the £37 million a year ago. Shares in MJ Gleeson trade at 976p (+0.41%). 13/2/20 12:15BST.

Boris says no to dissenters and the dispirited – big hitters axed in reshuffle

Jamie Gordon
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Boris says no to dissenters and the dispirited – big hitters axed in reshuffle
PM Boris Johnson has continued his programme of Boris-Cummings-politik, by carrying out a drastic cabinet reshuffle on Thursday. This latest move comes after complaints of selective media shut-outs and an over-involvement in the selection process of the incoming BBC top brass, alongside tensions surrounding Heathrow expansion and HS2 dissenters drumming up support. Today, the prime minister has called ministers into 10 Downing Street and has sounded the death knell for the following (former) ministers in the early knockings:
  • Julian Smith as Northern Ireland secretary
  • Andrea Leadsom as business secretary
  • Theresa Villiers as environment secretary
  • Esther McVey as housing minister
  • Nusrat Ghani as transport minister
  • Chris Skidmore as education minister
  • George Freeman as transport minister
Alongside this list – which features some considerable big-hitters – Geoffrey Cox resigned upon request as Attorney General, and we were already aware that Nicky Morgan was standing down as culture secretary. The reshuffle comes as PM Boris attempts to tailor his cabinet towards being a team more in line with his (somewhat unclear) vision for the UK.

Shock resignation

The most recent – and perhaps most surprising – resignation was that of Sajid Javid, after being ordered to sack his advisors. This latest move could prove seismic for the Johnson administration, though it has already been confirmed Rishi Sunak will replace Javid as Chancellor, and will likely deliver the budget in four weeks’ time. Dominic Raab will stay on as Foreign Secretary, Priti Patel remains Secretary of State and Michael Gove retains his position as Chancellor of the Duchy of Lancaster. At the very least, the PM will continue to be comforted by his confidante and master of ceremonies, Dominic Cummings. You’ll also be pleased to hear, Larry kept his post as Downing Street cat. Since the Thursday session began, Sterling went up from 1.19 to 1.20 against the Euro.

British house prices rise in January

Ishen Patel
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0
British house prices rise in January
Prices of British houses have risen at their fastest pace in nearly three months, as the property market looks to stabilize following a turbulent few months. The last three months have given some reassurance for the British people and British house prices, and a reflection in rising house prices may mean that some consumer confidence is being restored. Since the December election, where Boris Johnson wiped the floor clean of the Labour party, there have been developments in British Politics and Brexit. As I am writing now, my colleague to seats to the right of me is typing away updates on the cabinet reshuffle, as Boris Johnson looks to freshen his advisory committee in an attempt to restore British confidence in the government. The Royal Institution of Chartered Surveyors (RICS) said that house price index surged to +17 in January, from the -2 figure in December. “It remains to be seen how long this newfound market momentum is sustained for, and political uncertainty may resurface towards the end of the year. But at this point in time contributors are optimistic,” RICS chief economist, Simon Rubinsohn, said. Notably, the January reading was the highest reading since May 2017 and beat the forecast from both analysts and the market. Market traders and property experts praised the strong growth in London and South East, which had been previously facing troubles as Brexit took its weigh on the British property market. More properties were being listed for sale, and a steady rate of purchases also led to house prices increasing across the United Kingdom, and on these two metrics showed the fastest rise since August 2013. Halifax also reported a 4.1% rise in house prices annually, which was the biggest increase since February 2018. Notably, the Bank of England also said that lenders approved the most new portages since July 2017. Certainly, the outcomes of the election and the formal severance of British ties with the European Union has given some stability on the property market. There is still a long way to go and many clauses in Brexit will be unfolded, however this is a good sign that the property market has bounced back over the last few months.
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