Market report: House price bounce-back helps upbeat trading session

Fears that the property market could be plunged into a deep freeze by Covid-19 were eased a little earlier when industry figures showed a bounce back in house prices.

Reporting a 1.7% jump in prices for July, Nationwide said pent-up demand had outweighed economic uncertainty and the challenges of socially-distanced property viewings.

The building society added that behavioural shifts were also likely to have boosted activity, as people reassess their housing needs after life in lockdown. The Chancellor’s stamp duty holiday should also continue the positive trends in the near term.

The stats came as a relief to stocks directly linked to the property market, with shares in housebuilder Persimmon up 1% to 2456p and Barratt Developments 4p stronger at 522.8p. Online portals OnTheMarket and Rightmove were up 4% and 1% respectively.

The optimism mirrored a more upbeat session for investors after grim economic data in Germany and the United States triggered a rout for global markets on Thursday.

The FTSE 100 index, which fell by more than 3% at one stage yesterday to below 6,000, recovered some of the lost ground thanks to a much-needed rally for financial and mining stocks. NatWest was 3% higher in the wake of results, while Fresnillo raced more than 5% higher to help the FTSE 100 climb 26.9 points to 6017.

On another hectic day for corporate updates, cyber security company Avast was 15p higher at 573.5p after announcing a new product targeting the small business market. The company has almost doubled in value since mid-March.

Quality assurance business Intertek has also been on the front foot, with investors valuing its strong cash generation and defensive qualities. This was highlighted by today’s unchanged interim dividend of 34.2p, although shares dipped 42p to 5544p after a 32% fall in half-year profits.

Specialist banking group Paragon rose 5.8p to 322p after reporting an “encouraging” recovery in new business flows since the Covid-19 lockdown. This includes its buy-to-let pipeline, which went from a low of £598.7 million in May to now stand at over £700 million.

Among smaller stocks, legal business DWF fell 3p to 61p after announcing Jonathan Bloomer as its new chairman. The former Prudential CEO replaces stand-in chairman Chris Sullivan, who will revert to the deputy chairman role.