Equilibrium weekly roundup 02-10-19

This week’s roundup includes news that house price growth has almost ground to a halt, Sajid Javid has pledged to raise the National Living Wage to £10.50 within the next five years and Wonga mis-sold nearly 400,000 loans. 

House price growth ‘almost ground to a halt’

UK house price growth “almost ground to a halt” in September, with property prices 0.2% higher than a year ago, the Nationwide has said. 

The building society also said that prices fell by 0.2% compared with August, according to figures based on its own mortgage data. 

It said activity in the housing market had been slow, but stable, for two years. 

The average home was now valued at £215,352, it said. 

The year-on-year change in house prices is seen as the least volatile measure of the UK housing market. 

The 0.2% rise in September, down from 0.6% in August, marked the 10th month in a row in which annual price growth had been below 1%, the Nationwide said. 

Brexit uncertainty had widely been associated with the relatively static UK housing market, but some commentators have said this has led to pent-up demand. 

“When the extension of Brexit was announced there was a spike in activity in the market, which again reiterates the fact that it is uncertainty holding buyers back rather than a lack of interest,” said Iain McKenzie, chief executive of The Guild of Property Professionals. 

National Living Wage to rise to £10.50, says Chancellor Sajid Javid 

Chancellor Sajid Javid has pledged to raise the National Living Wage to £10.50 within the next five years. 

He will also lower the age threshold for those who qualify from 25 to 21. 

Speaking to a packed hall at the Tory Party Conference, Mr Javid said the policy would “help the next generation of go-getters to get ahead”. 

The current rate for over 25s is £8.21 – but the Living Wage Foundation says it should already be £9 across the UK and £10.55 for those in London. 

Earlier this year, Labour pledged to raise the National Living Wage to £10 an hour in 2020 and to include all workers under 18 - who currently get a minimum wage of £4.35. 

Labour’s shadow chancellor, John McDonnell, called Mr Javid’s announcement a “pathetic attempt at catch-up”. 

Mr Javid also confirmed £25bn for road projects, £220m for bus improvements and £5bn for digital infrastructure in his speech, along with extra funding for youth services. 

Wonga’s legacy of nearly 400,000 mis-sold loans 

Payday lender Wonga mis-sold loans to hundreds of thousands of people who will only receive a fraction of the compensation payments they are owed. 

Wonga was once the biggest payday lender in the UK. It was enormously successful until stricter regulation curtailed its, and other payday loan companies’, lending. 

It collapsed in August in the UK following a surge in compensation claims from claims management companies acting on behalf of people who felt they should never have been given these loans. The scale of the sale of unaffordable loans seems to have been underestimated, but has now become clearer as the firm’s administrators, Grant Thornton, have been running an automated claims service. 

The system checks claims against standards agreed with the Financial Ombudsman. The administrators said they had received 560,982 claims by the end of August. The majority (389,621) were justifiable and entitled to compensation. 

Ex-customers have until the end of Monday to make a claim for historic mis-sold loans via an online portal. 

Administrators hope to make payouts to those owed money by the end of January. 

So far, the compensation bill is £460m, with the average claim £1,181.