Soaring mortgage costs and the end of the government’s Help-to-Buy programme saw first-time buyers’ home reservations halve in the past year, the UK’s biggest homebuilder Barratt Developments said in a trading update this morning. Meanwhile, low-cost fitness studio operator Gym Group seems to be benefitting from the squeeze on household budgets, with memberships climbing 10% year-on-year.
Here’s the key business news from London this morning:
In The City
Barratt Developments Plc: The British homebuilder said reservations from first-time buyer reservations plunged by 49% in the year through June, while demand from existing homeowners held up better.
- The company saw build cost inflation of 9% to 10% in the year, although it expects that rate to come down to an average 5% in the next 12 months, given the market’s slowdown
Gym Group Plc: The gym operator’s revenue rose 18.5% in the first half, with memberships climbing 10% year-on-year.
- The company remains on track to meet market expectations for the year, Chairman John Treharne said
Kerridge Commercial Systems Ltd.: Private equity firm CapVest Partners agreed to buy the UK software provider from tech-focused investment firm Accel-KKR, adding to a flurry of technology dealmaking in Europe.
- The transaction values KCS at more than £800 million, people with knowledge of the matter told Bloomberg
UK GDP: The UK economy shrank less than expected in May even after an additional holiday to mark the coronation of King Charles III. Gross domestic product fell 0.1% after an 0.2% gain the month before. Economists had expected a drop of 0.3%.
In Westminster
Tens of thousands of junior doctors in England are walking out of hospitals for five days, starting today, plunging the NHS into the longest strike in its history at a time of record waiting lists.
Meanwhile, Britain’s prospective home buyers pulled back from the property market at the sharpest pace in eight months, in yet another sign that higher borrowing costs are weighing on affordability.
In Case You Missed It
UK trustbusters are ready to work with Microsoft Corp. to reverse their opposition to its Activision Blizzard Inc. takeover. “Emerging with their credibility intact will be challenging,” writes Bloomberg Opinion’s Chris Hughes.
British mobile bank Monzo is exploring a potential combination with Nordic peer Lunar Group as it looks for ways to expand in Europe, people familiar with the matter told Bloomberg. Venture capital firms have poured billions of dollars into fast-growing fintech firms, but as many incumbent providers adapt their own business models for the digital age, many predict banking startups will need to consolidate in order to achieve scale and stay competitive.
The owners of Premier League newcomer Sheffield United have told would-be purchasers they want £170 million for the team. Owned by former sports minister Saudi Prince Abdullah bin Musaid Al Saud, Sheffield United recently won automatic promotion to the Premier League after a second-place finish in the Championship. The club is expected to now receive a boost to broadcast income, potentially easing some of its financial concerns.
Looking Ahead
Emerging markets-focused asset manager Ashmore Group Plc will be among the companies capping off the earnings week tomorrow morning.
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