UK house prices rise at fastest pace in two years; Rightmove rejects fourth takeover offer from Rea Group – business live | Business

Rightmove has also tried to rebuff REA Group’s claims that it has not engaged properly with it, since its first takeover offer at the start of this month.

Rightmove accuses REA of taking an “incremental and iterative approach to price discovery”, having started off offering £5.6bn, and gradually increased it to the latest rejected bid of £6.2bn.

It tells the City:

The Rightmove and REA teams have known one another for many years, and have had numerous interactions, including discussions around strategy and best practice as recently as June.

Rightmove has taken every phone call that REA has made since its interest was first made public, with a level of engagement which in Rightmove’s view is customary and appropriate in the context of an unsolicited and unilateral series of approaches, made to a UK listed company, where the possible offeror is taking an incremental and iterative approach to price discovery.

Newsflash: Rightmove has rejected the fourth takeover offer from Australia’s REA group, which valued the UK property portal worth £6.2bn.

Rightmove has told the City that it has “fully reviewed the Latest Proposal with its financial and legal advisers”, and decided that it cannot recommend it to shareholders.

The Board has unanimously concluded that the Latest Proposal is unattractive and materially undervalues Rightmove, it says.

Rightmove explains:

The Board has taken into consideration the views of its shareholders and also considered the representations from the Chair and management team of REA….

The Board has concluded that the Latest Proposal remains unattractive and continues to materially undervalue Rightmove and its future prospects and that the Board cannot recommend the Latest Proposal to Rightmove shareholders.

Rightmove adds that its board remains confident in Rightmove’s standalone prospect as “the clear leader in the UK property ecosystem”.

REA Group, which is controlled by Rupert Murdoch’s News Corp, still has until 5pm today to either make a firm offer for Rightmove, or walk away. Ideally, it would want to have the board’s backing, though, rather than be forced to go hostile.

Over in south Wales, the steel town of Port Talbot is braced for the shutdown of the final furnace at its plant on Monday.

The closure will result in heavy job losses and deal a devastating blow to communities in the region.

Tata Steel has begun the process of winding down operations at blast furnace 4 at Port Talbot and engineers have already started altering the raw materials poured into the top of the furnace to prepare for decommissioning. Blast furnace 5 was closed in July.

The closure is part of Tata’s transition towards a greener form of steelmaking as it builds a £1.25bn electric arc furnace for the Port Talbot site by 2027, which produces steel by melting scrap metal.

The blast furnace closure will mean nearly 2,000 jobs will go at the plant over the coming months.

Despite that, unions say the Labour Government’s plan for Port Talbot is better than the pre-election plan

Speaking to BBC Radio 4’s Today programme, Charlotte Brumpton-Childs – the GMB union’s national organiser for manufacturing – explained:

“I think that the plan that we’ve got post-election is better than the plan that we had pre-election.

“We still ultimately end up in the same number of job losses, but there are more opportunities for people in the future in terms of investment commitments that the company have made, and a comprehensive trading package for those that are at risk of compulsory redundancy to be able to maintain employment with the business, and retrain and reskill.

“Hopefully ready for the electric arc furnace operations to come in the next couple of years.”

Britain’s only remaining coal power plant at Ratcliffe-on-Soar in Nottinghamshire will generate electricity for the last time today after powering the UK for 57 years.

The power plant will come to the end of its life in line with the government’s world-leading policy to phase out coal power which was first signalled almost a decade ago.

The closure marks the end of Britain’s 142-year history of coal power use which began when the world’s first coal-fired power station, the Holborn Viaduct power station, began generating electricity in 1882.

The shutdown has been hailed by green campaigners as a major achievement for the government in reducing the UK’s carbon emissions, providing international climate leadership, and ensuring a “just transition” for staff in Britain’s coal industry.

More here.

The UK economy grew more slowly than previously thought in the second quarter of the year, new data shows.

The Office for National Statistics has reported that UK GDP rose by 0.5% in April-June, down from a previous estimate of 0.6% growth.

This new data shows that Britain’s recovery from last year’s recession was a little slower than previously thought.

The ONS now estimates that the UK’s service sector grew by 0.6% in the quarter, not the 0.8% growth previously estsimated.

The production sector is estimated to have fallen by 0.3% in Quarter 2 2024, revised down from the previous estimated fall of 0.1%.

Construction output has fallen by 0.2% in Quarter 2 2024 (previously the ONS had reported a 0.1% fall). That’s the third consecutive quarterly fall, despite growth in May and June 2024.

The ONS also reports that families were left with less money to spend than previously thought in the last quarter.

Real households’ disposable income (RHDI) is estimated to have grown by 1.3% in Quarter 2 2024, down from 1.6% in the previous quarter.

The household saving ratio is estimated at 10.0% in the latest quarter, up from 8.9% in Quarter 1 2024, it adds.

If you look at property types, terrace houses have seen the biggest percentage rise in prices over the last 12 months, with average prices up 3.5%, Nationwide adds.

Semi-detached and flats saw increases of 2.8% and 2.7% respectively, while detached houses saw more modest growth of 1.7%.

But since the pandemic, it’s detached homes that have risen the fastest in price, lifted by the ‘race for space’ triggered by Covid-19.

Since the first quarter of 2020, the price of an average detached property increased by nearly 26%, while flats have only risen by around 15% over the same period.

Today is also D-day in the takeover battle for Rightmove.

Australia’s Rea Group has until 5pm today to table a full-blown takeover bid for the UK property portal, or be forced to walk away. Rea has already tabled four offers for Rightmove, with the latest – worth £6.2bn – coming last Friday.

Rea, which is controlled by Rupert Murdoch’s News Corp, has been urging Rightmove to engage with them, and also pressed for an extension to today’s deadline.

Rea’s latest offer values each Rightmove share at 781p, and the entire company, which is listed on the FTSE 100 share index, at about £6.2bn.

Under City rules, REA has until 5pm to make a firm offer or walk away….

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

We start the week with news that UK house prices have risen at their fastest pace since the aftermath of the mini-budget two years ago.

Lender Nationwide has reported that the average UK house price rose by 3.2% in the year to September, the quickest annual increase since November 2022.

On a monthly basis, prices rose by 0.7%, picking up pace after a 0.2% drop in August.

This lifted the average price to £266,094 this month, up from £265,375 in August.

Recent falls in mortgage rates appear to have stimulated the market, with the Bank of England having begun cutting Bank Rate in August.

Robert Gardner, Nationwide’s chief economist, explains:

“UK house prices increased by 0.7% in September, after taking account of seasonal effects. This resulted in the annual rate of growth rising from 2.4% in August to 3.2% in September, the fastest pace since November 2022 (4.4%). Average prices are now around 2% below the all-time highs recorded in summer 2022.

“Income growth has continued to outstrip house price growth in recent months while borrowing costs have edged lower amid expectations that the Bank of England will continue to lower interest rates in the coming quarters. These trends have helped to improve affordability for prospective buyers and underpinned a modest increase in activity and house prices, though both remain subdued by historic standards.

Nationwide reports that prices rose fastest in Northern Ireland, up 8.6% year-on-year in during the last quarter, while East Anglia was the weakest performing region, with prices down 0.8% over the year.

More to follow…

The agenda

• 7am: Nationwide house price index for September

• 7am BST: UK Quarterly Sector Accounts and balance of payments for April-June

• 9.30am BST: Bank of England mortgage approvals and credit data

• 1pm BST: Germany’s inflation report for September

• 2pm BST: ECB president Christine Lagarde appears before the Economic and Monetary Affairs committee of the European Parliament in Brussels