12th August 2021
Good morning Could the travel recovery be well and truly underway? Heathrow airport said July was its busiest month since March 2020. 1.5 million passengers passed through its gates over the month thanks to a mix of travel restrictions and isolation measures both relaxing.
- Housing affordability hits 10-year low
- Deliveroo doubles orders, loses less money
Yesterday's market moves
FTSE 100 +0.8% 7,220
FTSE 250 +0.8% 23,757
The FTSE 100 advanced for a fourth consecutive day, by a further 0.8%, to its highest since February 2020, although trading was lighter than usual. After also rising 0.8%, the FTSE 250 remained at its highest ever level. This came after inflation in America rose more slowly in July, soothing concern that the US central bank could hasten to reduce its crisis-era economic support.
Housing affordability hits 10-year low
What’s going on?
We all know houses are expensive but they are getting even more expensive relative to average wages, that’s according to a new report by Halifax Bank.
Housing affordability is now at a 10-year low, which will come as no surprise to anyone who has tried to get on the property ladder recently.
Why is this important?
It’s all a matter of quite simple maths - over the past year, the average house price in UK cities has grown by 10.3%, while average earnings for those living and working in cities rose just 2.1%.
The cost of an average UK city home is now 8x earnings, up from 5.6 in 2011. In the UK as a whole, average salaries are £38,600, while the average property costs £327,691.
Winchester has become the least affordable UK city to buy a home, taking the top spot from Oxford. Property prices in Winchester are on average 14x people’s earnings, higher than Greater London at 11x.
At the other end of the scale Londonderry, Northern Ireland is the most affordable city with homes costing 4.7x earnings.
Halifax said that affordability is significantly better in the North and there are now just two cities - Plymouth and Portsmouth - with better than average affordability in the South.
A combination of stagnant wages and a strong demand for property fuelled by the stamp duty holiday has made it even harder for Brits to secure homes.
But with interest rates at record lows making mortgages more affordable, the British love of home ownership doesn’t show any sign of stopping.
Deliveroo doubles orders, loses less money
Food delivery app, Deliveroo, announced that even though lockdown restrictions are lifting, consumers still have a strong appetite for takeaways.
The London-based company reported orders of 148.8 million in the six months to June, doubling from 74.5 million in the same period a year ago.
It also posted a pre-tax loss of £104.8m, down from the £128.4m it lost in the first six months of 2020.
The news came as Deliveroo released its first set of results since making its disappointing public market debut in March when shares fell 30% on the first day of trading.
Companies like Deliveroo were clear winners from the pandemic but many wondered how delivery firms would fare as restaurants and cafes reopened after lockdown.
Critics had flagged that if Deliveroo cannot make a profit when competition from the hospitality industry was erased during lockdown, then how would it when normality returns.
The company also played down talk of a takeover after its German rival Delivery Hero revealed it had bought a 5% in the business earlier this week. But given the recent spending spree by foreign firms in the UK market, many investors think that Deliveroo could find itself on someone’s shopping list.
Stat of the day
1.8 million Brits became stock market day traders during the pandemic
Other stories to keep you in the loop
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- Oil drops after Biden tells Opec to boost output
- Morrisons to give workers Boxing Day off
- Google may cut the pay of remote workers
- Demand for houses worth £1m is greater outside London than inside
- Weight Watchers shares sink as consumers pause diets to live their best lives