London open: Stocks fall as investors mull house price data

(Sharecast News) - London stocks fell in early trade on Tuesday as data showed that house prices fell in December for the first time since March, although they ended the year in the black. At 0850 GMT, the FTSE 100 was down 0.4% at 8,219.07.

According to Halifax, house prices declined by 0.2% on the month following five consecutive monthly increases, and 1.2% growth in November.

On an annual basis, prices were up 3.3%, down from 4.7% growth in November and leaving the average price of a home at £297,166.

Amanda Bryden, head of mortgages at Halifax, said: "The housing market was broadly steady at the start of 2024, with house price growth taking off from the summer onwards. In the latter half of the year, house prices grew in response to the falls in mortgage rates, alongside income growth, both leading to financial pressures somewhat easing for buyers.

"Impending changes to Stamp Duty thresholds have also given prospective first-time buyers even greater motivation to get on the housing ladder and bring any home-buying plans forward. Together, these elements meant mortgage demand picked up, hitting the highest level in over two years and back to levels seen pre-pandemic.

"In many areas across the country, house prices were also buoyed by demand outstripping supply, possibly further amplified by homeowners holding off putting their property on the market - perhaps in anticipation of mortgage rates reducing further."

She said that while the housing market has been supported in recent months by falling mortgage rates, income growth and the announcement on upcoming Stamp Duty policy changes, mortgage affordability will remain a challenge, especially as the Bank Rate is likely to come down more slowly than previously predicted.

"However, providing employment conditions don't deteriorate markedly from a more recent softening, buyer demand should hold up relatively well and, taking all this into account, we're continuing to anticipate modest house price growth this year."

In equity markets, JD Sports was the top gainer on the FTSE 100 after Bank of America Merrill Lynch reinstated coverage of the stock at 'buy'.

Next was also a high riser as the clothing retailer lifted full-year guidance after better-than-expected December sales but warned UK growth is likely to slow, as employer tax increases, and their potential impact on prices and employment, begin to filter through into the economy.

Full-year guidance for the 12 months to January was lifted by £5m to £1.01bn after underlying full-price sales rose by 5.7% against expectations of a 3.5% increase. For 2026, Next anticipates full-price sales growth of 3.5% and profit before tax of £1.046bn, up 3.6%.

3i Group advanced after Citi opened an "upside catalyst watch" on the buy-rated shares, but AJ Bell fell after the bank cut its rating to 'sell', citing risks from cash balances and competitor pricing.

Raspberry Pi slid after a downgrade to 'reduce' at HSBC, while Pennon was knocked lower by a downgrade to 'sell' at Deutsche Bank and Mondi lost ground after a downgrade to 'neutral' at BNPP Exane.

Housebuilder Taylor Wimpey was weaker after a downgrade to 'equalweight' at Barclays.

Coats Group retreated as the industrial thread maker said that chief financial officer Jackie Callaway has mutually agreed with the board that she will step down from her role at the conclusion of the annual meeting on 21 May.

Market Movers

FTSE 100 (UKX) 8,219.07 -0.37%

FTSE 250 (MCX) 20,506.95 -0.51%

techMARK (TASX) 4,618.15 -0.31%

FTSE 100 - Risers

JD Sports Fashion (JD.) 101.55p 3.69%

Next (NXT) 9,820.00p 2.78%

Entain (ENT) 706.20p 1.93%

3i Group (III) 3,680.00p 1.60%

Antofagasta (ANTO) 1,664.50p 1.34%

BAE Systems (BA.) 1,156.50p 0.96%

Diageo (DGE) 2,526.50p 0.92%

Shell (SHEL) 2,601.00p 0.91%

Sage Group (SGE) 1,302.50p 0.89%

Fresnillo (FRES) 648.50p 0.70%

FTSE 100 - Fallers

Associated British Foods (ABF) 2,006.00p -2.34%

NATWEST GROUP (NWG) 400.60p -2.22%

HSBC Holdings (HSBA) 768.90p -1.99%

Standard Chartered (STAN) 984.40p -1.95%

WPP (WPP) 776.20p -1.80%

Compass Group (CPG) 2,596.00p -1.78%

Barclays (BARC) 268.25p -1.67%

Taylor Wimpey (TW.) 118.00p -1.63%

Sainsbury (J) (SBRY) 273.00p -1.52%

Tesco (TSCO) 367.40p -1.50%

FTSE 250 - Risers

Burberry Group (BRBY) 988.60p 3.67%

Oxford Nanopore Technologies (ONT) 138.00p 3.53%

Moonpig Group (MOON) 218.00p 1.40%

Foresight Solar Fund Limited (FSFL) 76.10p 1.20%

Pets at Home Group (PETS) 207.60p 1.07%

Aston Martin Lagonda Global Holdings (AML) 106.30p 0.95%

Tritax Big Box Reit (BBOX) 134.10p 0.90%

Babcock International Group (BAB) 496.80p 0.89%

Endeavour Mining (EDV) 1,473.00p 0.89%

WH Smith (SMWH) 1,196.00p 0.84%

FTSE 250 - Fallers

Raspberry PI Holdings (RPI) 578.50p -4.85%

Pennon Group (PNN) 559.00p -3.37%

AJ Bell (AJB) 437.00p -3.32%

International Workplace Group (IWG) 155.70p -2.63%

Wood Group (John) (WG.) 66.25p -2.57%

Vistry Group (VTY) 557.50p -2.53%

Carnival (CCL) 1,738.50p -2.47%

Bank of Georgia Group (BGEO) 4,635.00p -2.01%

Alpha Group International (ALPH) 2,255.00p -1.96%

Coats Group (COA) 91.50p -1.82%