UK Confidence, Luxury Home Prices Decline

123jump.com Staff
30 Jan, 2009
New York City

The benchmark stock index in London trading dropped 1% after consumer confidence declined and luxury home price index fell in December. Homes priced more than

[R]1:00PM New York, 6:00PM London - U.K. consumer confidence falls in January. London luxury home prices drop 3.7% in December.[/R]

London market averages dropped as a private report showed that the country’s consumer confidence dropped in January. A separate report from luxury home realtor Knight Frank also indicated that luxury home sales in London shed 3.7% in January.

In London trading FTSE 100 index fell 1% or 40.47% to 4,149.64.

Of the FTSE 100 index stocks, 48 gained, and 54 declined. Land Securities led gainers in the index shares with a rise of 8.8% followed by 3i Group increasing 7.9%.

U.K. Consumer Confidence Falls

Consumer insight agency Gfk NOP reported today that the UK consumer confidence dropped 4 points from a month ago and 24 points from a year earlier to –37. Four of the five gauges that constitute the index fell in the period.

The index measuring changes in personal finances dropped by 3 points from a month ago and 20 points from the same period a year ago to –18. The projection for personal finances over the next year declined 4 points to –14.

The report notes that the measure for the general economic situation of the country in the last year has declined by 8 points to –80 and fell 44 points than the same period a year ago.

Expectations for the general economic situation over the next year have plunged by 7 points to –48 and are 22 points lower than a year ago.

In addition, the major purchases measure has risen by 2 points to -27, but 14 points lower than this time last year, and the ‘now is a good time to save’ Index, fell 10 points to -18, which is 48 points lower than January 2008.

London Luxury Home Prices Fall 3.7% in January

Bloomberg News reported today that Knight Frank said in an e-mailed statement that the average price of homes costing more than £1 million fell 3.7% in January from a month earlier.

Prices have plunged 21% in the past 12 months.

The company said the market is now expected to rebound in the short term.

Knight Frank’s head of residential research Liam Bailey said, “The sudden restriction of mortgage finance. This factor is continuing to cause problems for the housing market and the wider economy. Price falls should begin to level out towards the end of 2009, although 2010 is likely to see prices move sideways at best.”

Gainers & Losers

Land Securities led gainers in the FTSE 100 index shares with a rise of 8.8% followed by increases in 3i Group of 7.9%, in Barclays Plc of 5.8%, in International Power Co. of 5.1%, and Royal Bank of Scotland of 4.8%.

Xstrata led decliners in the FTSE 100 index shares with a drop of 8.3% followed by losses in British Airways of 8.3%, in BHP Billiton of 7.5%, in Antofagasta of 6%, and WPP Plc of 5.7%.

Commodity stocks fell as crude oil prices dropped to $46 per barrel Anglo America shed 5.5%, Eurasian Natural plummeted 5.1%, Kazakhmys fell 4.3%, and Royal Dutch Shell dipped 4%.