House prices dropped in May

Get straight to the good stuff every day with the Multiply Minute; a lightning-quick round-up of the money news and how it affects you.

House prices fall

May saw the fastest drop in house prices since the financial crash in 2009, as coronavirus caused sales to slump. Prices fell 1.7% in May according to the Nationwide house price index after sales ground to a halt in lockdown. Viewings and valuations are now allowed again, but the future outlook of the housing market is still very uncertain.

Adviser comment:  We agree that the outlook for the housing market is uncertain driven largely around uncertainty around job security.

Renters keen to move

Demand for places to rent is 22% higher than this time last year according to Rightmove. As well as postponed moves from the last two months, experts have speculated that lockdown break-ups and job changes are pushing people to find somewhere new to live. With supply of properties unable to keep up, we could see an increase in rent prices.

Adviser comment:  Some of this may simply be the release of built up demand caused by the easing of the lockdown restrictions. However, rent is usually people’s biggest essential outgoing so you can’t ignore the impact of this on your finances. One thing to watch out for is whether working from home will have an impact on the features people look for in a home, e.g. a study.

FCA takes insurers to court

The Financial Conduct Authority (FCA) is preparing to take legal action against insurers* who refused to pay out to coronavirus-stricken businesses. Many small companies had business interruption policies but were told they weren’t covered for losses caused by coronavirus. The courtroom ruling will determine whether they get a payout.

Adviser comment:  Regardless of any legal outcome, we’d remind you to read any insurance policies that you have, or new ones you take out, to ensure you properly understand what you are and aren’t covered for.

Solar cheaper than coal

More than half of the electricity generated from renewables such as wind and solar is now cheaper than getting it from coal, according to a new report. It calculated that the world could save up to $23 billion per year by using renewables to replace the most expensive coal-fired power. Boss of the International Renewable Energy Agency (IRENA) described the finding as a “turning point”.