London pre-open: Stocks to edge up; Currys rejects takeover bid from Elliott

(Sharecast News) - London stocks were expected to edge up on Monday, but trade was set to be fairly quiet with US markets closed for Presidents' Day. The FTSE 100 was called to open around 10 points higher.

Data out earlier showed that house prices strengthened in February as mortgage rates continued to fall.

According to Rightmove's latest house price index, average new seller prices rose by 0.9% on the month, or 0.1% year-on-year.

It is the first time the annual price change has edged into positive territory after six months of falls.

In January, prices rose 1.3% on the month but fell 0.7% year-on-year.

The average asking price is now £362,839.

Agreed sales in the first six weeks of 2024 jumped 16% on the same period a year earlier. There were also upticks in new listings and buyer enquiries, both up 7% year-on-year.

Tim Bannister, director of property science at Rightmove, said: "Early-bird Boxing Day buyers got a head start in cherry-picking from a record level of new property choice and have now been joined many other buyers also believing that 2024 offers the right market conditions to move.

"Mortgage rates have fallen considerably from their peak and are now remaining broadly stable after the uncertainty of late 2022 and 2023.

"Momentum to move in 2024 is continuing to build."

However, Rightmove noted that the market remained particularly price-sensitive, with cheaper homes selling more quickly than higher-priced properties.

On average it is taking more than two weeks longer to find a buyer than it was this time last year. Stripping out the pandemic, the average time to sell is its slowest since 2015.

The Bank of England increased the cost of borrowing 14 times as it looked to tackle surging inflation, to 5.25%.

However, it has left rates unchanged since August and most analysts agree the next move will be a cut.

Mortgage rates, meanwhile, soared in response to the government's disastrous mini Budget in 2022. But they have started to moderate in recent months.

In corporate news, US private equity firm Elliott Advisors confirmed it was considering a possible cash offer for struggling electrical retailer Currys.

Elliott, which bought the UK bookstore chain Waterstones in 2018, said in a statement there was "no certainty that an offer will be made for Currys" or the terms on which any bid might be made.

Currys on Sunday rejected Elliott's approach, saying its £700m proposal "significantly undervalued" the chain.

Elliott has until March 16 to make a firm bid.

Student accommodation specialist Unite Group announced a strategic partnership with Newcastle University, agreeing to jointly develop 2,000 new student beds.

The firm said that, with total development costs estimated at £250m, its share would amount to £128m, positioning it as the development and asset manager with a 51% ownership stake in the venture.

It said the initiative at Newcastle University's Castle Leazes site would involve the demolition of existing accommodation this summer, with the new beds slated for completion between 2027 and 2028.