London pre-open: Stocks to gain on positive US cues; house price growth slows

(Sharecast News) - London stocks were set to rise at the open on Friday following a positive close on Wall Street, as investors mulled the latest house price data from Nationwide. The FTSE 100 was called to open around 15 points higher.

Figures released earlier by Nationwide revealed a slowdown in house price growth.

House prices ticked up 0.1% on the month in January following a 0.7% increase in December 2024, missing expectations for 0.3% growth.

On the year, house prices rose 4.1% in January following a 4.7% jump the month before.

The average price of a home was £268,213, down from £269,426.

Nationwide chief economist Robert Gardner said: "The housing market continues to show resilience despite ongoing affordability pressures. As we highlighted in our recent affordability report, while there has been a modest improvement over the last year, affordability remains stretched by historic standards.

"A prospective buyer earning the average UK income and buying a typical first-time buyer property with a 20% deposit would have a monthly mortgage payment equivalent to 36% of their take-home pay - well above the long-run average of 30%.

"Furthermore, house prices remain high relative to average earnings, with the first-time buyer house price to earnings ratio standing at 5.0 at the end of 2024, still well above the long run average of 3.9. Consequently, the deposit hurdle remains high.

"This is a challenge that has been made worse by the record increase in rents in recent years, which, together with the cost-of-living crisis more generally, has hampered the ability of many in the private rented sector to save."

In corporate news, engineering business Smiths Group said it was selling its interconnect unit and planned to demerge or offload the detection operation as part of a strategic review that includes extending its share buyback to £500m.

Smiths added that the recent cyber attack was limited to internal enterprise systems, and it had "made good progress in the recovery of these, with most critical systems being back online".

"As a result of the immediate, proactive measures that we took, we have been able to minimise the impact on our operations," it said.

"In terms of financial impact, our guidance for the full year is unchanged noting that, given the proximity of the incident to our half year close, we anticipate a portion of the revenue from the last week of January will shift into the second half of the financial year."

Tritax Big Box reported a strong balance sheet in an update, with a loan-to-value ratio of 29% as of 31 December, down from 32% a year earlier.

The company said its weighted average cost of debt rose slightly to 3.1%, though 93% of drawn debt remained fixed or hedged.

Total available liquidity exceeded £500m, while weighted average debt maturity declined to 4.5 years from 5.2 years in 2023.