What to watch: Mortgages leap off record low, Aston Martin and Taylor Wimpey losses

Tom Belger and Jill Petzinger
·4 min read
NORWICH, ENGLAND - JUNE 19:  A Norwich City shirt is displayed in the window of a house ahead of the Premier League match between Norwich City and Southampton FC at Carrow Road on June 19, 2020 in Norwich, England. (Photo by Stephen Pond/Getty Images)
Homes in Norwich as mortgage lending picks up. Photo: Stephen Pond/Getty Images

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

UK mortgages jump off record low

Official figures show UK lenders approved 40,000 mortgages for property purchases in June, surging off the back of a record low 9,300 in May.

The Bank of England figures showed mortgage approvals remained significantly below the 73,700 seen in February, however. The property market had seen a post-election boom before COVID-19 sent sales into freefall.

Low interest rates and pent-up demand have fuelled a rebound since lockdown restrictions eased despite the economic crisis, but pressures on banks have seen some tighten lending rules in recent months.

“Whilst today’s statistics paint a more positive picture for the UK housing market, we must not forget that these are still uncertain times and buyers may still experience challenges when applying for the mortgage they require,” said Ross Counsell, director of property buyers Good Move.

Aston Martin losses soar

Luxury British carmaker Aston Martin Lagonda (AML.L) reported a first-half operating loss £159.3m ($206m) on Wednesday, more than four times the £38.9m operating loss it posted for the same period in 2019 — as the company increased spending for its SUV launch and weathered coronavirus lockdowns.

Sales in the first half of this year plunged by 41%, with the biggest sales drop, 48%, in the last quarter, as coronavirus lockdowns forced dealerships and plants to close.

“It has been a challenging period with our dealers and factories closed due to COVID-19, in addition to aligning our sales with inventory with the associated impact on financial performance as we reposition for future success,” Aston Martin executive chairman Lawrence Stroll said in a statement.

Aston Martin has had a turbulent couple of years since going public in 2018. It made a loss of £100m in 2019, then was forced to raise £500m in a rescue deal at the beginning of this year via an investment led by Stroll, a Canadian Formula 1 billionaire.

Taylor Wimpey home completions plummet despite market rebound

Stocks in Taylor Wimpey (TW.L) shed 7.5% on Wednesday, as it swung to a loss in the first half of the year and warned of a steep drop in new home completions.

Britain’s third largest housebuilder said it expected to complete about 40% fewer homes this year than in 2019. Homes scheduled for completion in the final three months of this year will now largely be delayed until the first three months of next year.

The company shut down sites as the coronavirus sent Britain into lockdown in March, and the pandemic and safety measures appear to be hampering construction despite all sites reopening since. Building sites are operating at 80% capacity, according to the company.

“This will have a significant impact on revenues and margins in 2020 and will have some knock on impact on 2021 delivery,” according to the company’s half-year results published on Wednesday.

Coronavirus: Stocks tread water ahead of Fed meeting

European markets tread water in early trading on Wednesday, with investors waiting for a Federal Reserve meeting in the US later in the day.

The Fed had already announced on Tuesday (28 July) it would extend most of its emergency programmes until the end of the year as its two-day policy meeting got underway in Washington, DC.

The central bank’s chair Jerome Powell will hold a press conference later on Wednesday. Naeem Aslam, chief market analyst at Avatrade, said on Tuesday (28 July) the meeting made traders “hesitant” about placing bigger bets.

Trading was fairly muted in Europe. The FTSE 100 (^FTSE) opened flat and the DAX (^GDAXI) lost 0.1%, though the CAC 40 (^FCHI) gained 0.5%.

It follows a mixed trading session overnight in Asia. Japan’s Nikkei (^N225) lost 1.2% and Australia’s ASX 200 (^AXJO) fell 0.2%, but Shanghai Composite (000001.SS) rose 0.7%, and the Hong Kong Hang Seng (^HSI) rose 0.5%.

But US futures pointed to a slightly higher open. S&P 500 futures (ES=F) were up 0.2%, Dow Jones futures (YM=F) up 0.1%, and Nasdaq futures (NQ=F) up 0.4%.