London pre-open: Stocks to rise; car finance scandal in focus

(Sharecast News) - London stocks were set to rise at the open on Wednesday, with the motor finance scandal in focus after the Financial Conduct Authority said lenders would have to pay up to £11bn in compensation. The FTSE 100 was called to open around 15 points higher.

Lloyds Banking Group said it was "assessing the implications" of an announcement by the Financial Conduct Authority to charge motor finance lenders £11bn in compensation for unfair practices.

The FCA said it expects payouts on 14m finance agreements, where there were "widespread failings" in how lenders disclosed commission payments to brokers, to start next year, with customers receiving around an average £700 in compensation per agreement.

Lloyds said it is looking at "the impact of this consultation in the context of its current provision for this issue and will update the market as and when appropriate".

Danni Hewson, AJ Bell head of financial analysis, said: "Lenders had already breathed a sigh of relief about the scale of the compensation they would have to dish up to motorists and today's update from the FCA brings the bar even lower.

"But 14 million car buyers do stand to receive a significant amount of compensation after the regulator said motor finance firms broke rules and didn't properly inform motorists of the commission that was being paid out to dealers.

"For those who have previously taken out loans it will require a shuffle through old paperwork to put in a complaint to lenders or brokers, while those who have already complained won't need to do so.

"This decision brings to an end a rather ugly chapter in car finance lending and consumers are warned that they could lose significant portions of any compensation due if they use third parties to make a claim.

"Whilst this scandal doesn't come close to that surrounding PPI it does leave a bad taste with many motorists.

"Buying a car is often an intimidating process and one that sometimes comes with the pressure of making a quick decision in order to grab hold of the deal on the table.

"For many people it's a matter of whether they can afford the car they want at the price that works for their budget and the complicated extras make decisions harder.

"But car finance is also the only way many people can afford the vehicles that get their kids to school, get them to work and makes life possible."

Elsewhere, Anglo American said its blockbuster tie-up with Teck Resources remained firmly on track, despite the Canadian target cutting its full-year production guidance.

Teck posted third-quarter copper sales of 110,300 tonnes late on Tuesday, below forecasts for around 129,000 tonnes.

It also cut full-year guidance for copper production to between 415,000 and 465,000 tonnes. Teck had previously targeted 470,000 to 525,000 tonnes.

Production has been hit by ongoing issues at its Quebrada Blanca project in Chile, and the development of its tailings management facility in particular.

Student accommodation provider Unite Group said that 95.2% of beds for the 2025/26 academic year were now sold, down from 97.5% at the same time a year earlier. Unite also said sales to date had delivered rental growth of 4%, down from 8% in the prior year.

The group reiterated its forecast for FY25 adjusted earnings per share of 47.5p to 48.25p, citing strong demand and portfolio performance.

Unite said its USAF portfolio was valued at £2.85bn, unchanged over the quarter but up 1.4% year-to-date, while LSAV assets rose 0.4% in the quarter to £2.11bn, marking a 1.9% increase year-to-date. It also added that its proposed acquisition of Empiric Student Property remained on track, with completion expected in Q226, subject to regulatory approvals.