Capital Markets Corporate

July 1, 2021

Our Weekly Newsletter

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Across Instinctif Partners’ Financial Services team, we are always keeping an eye on the key developments taking place across the sector to evaluate their impact on the many businesses we work with. Here we share our picks of the week’s most interesting news, and our expert views.

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House prices rise at fastest pace since 2004

UK house prices rose 13.4% in the year to June, the fastest pace since November 2004, according to Nationwide. The building society said the average house price increased to £245,432 from £216,403 in June 2020. Nationwide chief economist Robert Gardner noted that prices were close to a record high in relation to average incomes, making it harder for first-time buyers. He added that the pandemic had stimulated the housing market, with many reassessing what they want from a home in terms of space and location following the various coronavirus lockdowns. (From BBC, 29th June 2021)

Investors pile $54bn in to ESG bond funds in fiery start to 2021 

Investors poured $54bn into bond funds specialising in environmental, social and governance issues in the first five months of 2021, according to data provider Morningstar. In comparison, the whole of 2020 saw almost $68bn worth of sales of all ESG bond funds. Assets under management in the products increased 14% to $374bn between January and May, and almost tripled in three years. However, rising interest has prompted concerns of greenwashing, including fears that some bond funds are not as sustainable as they claim to be. Fund managers are also finding it difficult to decipher their ESG credentials. (From Financial Times, 25th June 2021)

Buy-to-let exodus looms large  

The number of UK homes for rent could drop significantly, as landlords leave the market due to higher taxes and stricter rules. According to the Nottingham Building Society, almost a million landlords will review their property portfolios in the next year and the number planning to sell homes (20%) outnumbers those planning to buy (16%). Elsewhere, a new report by the University of York and the Nationwide Foundation found that a large cohort of baby boomer landlords were retiring from the market without being replaced by younger landlords due to diminished returns and more stringent regulation. (From Daily Mail, 29th June 2021).

Financial Reporting Council opens investigation into auditors over Greensill 

The UK’s accounting watchdog has officially opened investigations into auditors including PwC over their work with Greensill Capital. The Financial Reporting Council’s investigations – which were made public on Monday – are the latest in a string of investigations to do with Greensill and its customers, after it entered administration earlier this year. (From The Guardian, 28th June 2021)

Climate change policies to raise cost of living 

Economists have pointed out that the rises in the cost of living for families will be driven not only from the negative effects of climate change, but also by the decisions and technologies to combat it. There is a growing conversation over who should pick up the tab. Experts from Citi, IFS, Berenberg and UBS comment on how big the impact will be. (From the Telegraph, 27th June 2021)

 

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