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The mortgage rate decline it would take to make an average home affordable is ‘unrealistic,’ Zillow says
Since the pandemic, U.S. mortgage rateshave risen dramatically. This surge, combined with historically high home prices, has tanked housing affordability, with first-time homebuyer rates falling to half the historical average. Even a substantial drop in mortgage rates would not restore housing affordability for most Americans.During the pandemic, one of the few things people enjoyed were low mortgage rates. From spring 2020 through 2021, mortgage rates were around or even below 3%. Rates steadily crept up during 2022 and 2023, peaking at 8% in late 2023.Recommended VideoAt the time, economists warned home buyers to get used to high mortgage rates. Today, mortgage rates are still nearly 7%. High mortgage rates have been just one facet of the housing affordability crisis in the U.S. Home prices are also historically high—up more than 53% since the onset of the pandemic. As a result, the number of first-time homebuyers is half the historical norm. In order for a typical home to be affordable to a buyer, mortgage rates would need to drop to 4.43%, Zillow economic analyst Anushna Prakash reported Tuesday. But “that kind of a rate decline is currently unrealistic,” she said. Meanwhile, not even a 0% interest rate would make a typical home affordable in New York, Los Angeles, Miami, San Francisco, San Diego, or San Jose, according to Zillow.“It’s unlikely rates will drop to the mid-[4% range] anytime soon,” Arlington, Va.-based real estate agent Philippa Main toldFortune. “And even if they did, housing prices are still at historic highs.” With 11 years of experience, Main is also a licensed mortgage loan officer The factors affecting housing affordability in the U.S.Prakash’s analysis holds income, home prices, and all other housing-related costs equal. This gets at the crux of the ongoing issues of the U.S. housing market: There are a variety of factors that affect housing affordability. And even if one were to change drastically, it wouldn’t result in a sudden affordability surge for hopeful home buyers. “While lower rates certainly help, they are just one piece of a far more complex puzzle that includes inventory shortages, wage stagnation, and rising insurance and tax costs,” James Schenck, CEO of PenFed Credit Union, toldFortune. “In other words, housing affordability is about more than just the Fed—it’s about the full ecosystem of access and equity.”Wages haven’t kept up with home prices: Rents and house prices have been rising faster than incomes across most regions of the U.S., according to a 2024 report from the U.S. Department of the Treasury. In turn, Americans need to make more than six figures to afford a median-priced home, according to Realtor.com, but the average salary in the U.S. is only slightly more than half of that. “Even in markets that have seen a heavy correction and have lost 10% [or more] of value, homes are still selling for a higher percentage of people’s average income, making them feel more expensive than they did five years ago,” Main explained. She encourages her clients to look for a home that meets 85% to 90% of their criteria—say living further away or having one less bedroom—to have a shot at actually finding a home that’s affordable for them. That can be frustrating, though, considering that housing is so expensive “people don’t want to compromise because they feel they are committing so much more financially.”Combating deteriorating housing affordabilityEven if you can’t buy your dream home initially, there are other options to make it feel that way after it’s been yours for a while. More people are pouring home equity into renovations and staying in place instead of shelling out for a more expensive home at the start. Plus, being more modest from the outset can put you on a better path for eventually buying a new home.“It’s easier to buy your dream home once you’ve built equity in another home you can sell, than it is to hold out for the perfect fit while still renting,” Main said, who also suggested looking at homes that have been on the market for longer. Sellers might be more willing to negotiate prices or give closing cost credits or mortgage rate buy downs, she added. There are also various mortgage options through smaller banks and credit unions, as well as special VA rates and adjustable-rate mortgages (ARM) that can be more affordable for some borrowers. Because credit unions are structured differently from for-profit mortgage lenders, they can offer lower loan rates and fees, Schenck explained.“We aren’t waiting for the market to change,” he said. Main also said mortgage rates from local banks and credit unions can be more lucrative for some home buyers, but it’s important to know what’s the best fit financially for a home buyer. One of her clients recently got a lower interest rate through a local credit union, but it’s an ARM that will ultimately change to an unknown rate in the future. “It got them in the home they wanted at the monthly payment they can afford, and they plan to refinance into a traditional conventional loan later,” she said.Join us at the Fortune Workplace Innovation SummitMay 19–20, 2026, in Atlanta. The next era of workplace innovation is here—and the old playbook is being rewritten. At this exclusive, high-energy event, the world’s most innovative leaders will convene to explore how AI, humanity, and strategy converge to redefine, again, the future of work. Register now.
Big rise in distressed companies in Wales
Almost 19,300 Welsh companies are now classed as being in ‘significant’ financial distress, according to research from insolvency practice Begbies Traynor. Its latest quarterly Red Flag Alert, which monitors the financial health of UK companies, shows a rise in Q4 of 2024 in Wales of 32.1% on the previous year - although only 0.1% up on the quarter. In Swansea it was up 28% (907 firms) on the year and 14.1% in Cardiff (2,254 firms). The increase has been linked to ongoing economic uncertainty, coupled with the impending impact of the tax, national insurance and national minimum wage increases from April, following Rachel Reeves’ autumn Budget announced last autumn. There are 3,266 construction related Welsh businesses in significant distress, making it the most troubled sector. There have also been significant increases in the number of retailers and travel and tourism businesses in Wales facing difficulties, with these industries seeing annual increases of 67.5% and 52.8% respectively, UK-wide the Red Flag Alert research recorded 654,765 businesses in significant distress, which is 21.3% higher than the same period in 2023. In addition, there has been a worrying surge in the number of businesses in the UK entering ‘critical’ financial distress, rising by 50.2% to 46,853 companies. Huw Powell, partner at Begbies Traynor for south Wales, said:“Even at this very early stage, the outlook for the rest of 2025 is challenging, and many companies are clearly struggling to adapt to the compounding issues they are facing. Unfortunately, there is no easy fix, which will be very unsettling for businesses who are struggling to tread water already. “For many companies, which were already dealing with rising operational and borrowing costs, the increase in national insurance contributions and the national minimum wage announced at the last UK Budget, could result in further financial strain at a time when confidence is already low.
Top Stories
In a frozen luxury housing market, buyers are asking to ‘try before you buy’ and having sleepovers in multimillion-dollar mansions
Emily Miller
Luxury homeownersare increasingly struggling to sell at desired prices, prompting a rise in creative tactics like sleepover trials and steep price cuts. New taxes in areas like Los Angeles and Cape Cod make luxury transactions even more costly, forcing sellers to be more mindful and flexible with pricing strategies.In today’s luxury housing market, it’s become increasingly difficult to sell for what the homeowner might think the home is worth—and even high-profile sellers have been forced to drop prices on their megamansions. Recommended VideoBecause home prices and mortgage rates remain elevated, buyers are scrutinizing their purchases now more than ever. Plus, in several luxury housing markets, extra “mansion taxes” are tacked on, making purchasing costs even more expensive. So to woo prospective buyers, sellers are trying a new tactic: offering up sleepovers in their mansions to help seal the deal. Julian Johnston, a real estate agent with The Corcoran Group in Miami, said this is a trend he’s seeing more frequently in today’s luxury market as sellers and agents are forced to become more open to creative strategies like pricing adjustments and unique marketing campaigns to stand out. “In the luxury sector, where buyers often have the means and the time to wait for the right property, anything that sparks fresh attention and differentiates a home from its competition can help move the market forward,” Johnston toldFortune. The Wall Street Journalfirst reported about this trend earlier this week, offering the example of a $60 million mansion where the owner allowed an overseas couple to stay at the home for two months at $250,000 per month before putting in an offer. Eric Albert, the homeowner, toldWSJthe potential buyers wanted to be sure the home was comfortable for them and make sure it was a good size and layout for them.“For $60 million, you should try it before you buy it,” Albert toldWSJ.“It’s a smart thing to do.”While Johnston toldFortunehe’s not seeing it with the majority of listings yet, “it’s certainly gaining traction in high-end markets where buyers are more selective.”Other real estate experts, however, see this as potentially a move of desperation for sellers—and a signal some luxury homes are overpriced at the start. “Sleeping in the house to get a feel for it is one of the oddest concepts I’ve ever heard of,” Simon Isaacs, founder of Palm Beach, Fla.-based luxury firm Simon Isaacs Real Estate, toldFortune. “That doesn’t mean it won’t happen. Stranger things have happened.”The frozen luxury housing marketDuring the past couple of years, there have been several notable cases of high-profile people being forced to drop the price on their lavish luxury homes. In April 2024, billionaire media mogul Rupert Murdoch majorly slashed the price of his Manhattan penthouse by 40% to $38.5 million. Not only did that mean he ended up listing it for far less than he wanted, but he also ended up losing money because he bought the property for $57.9 million in 2014. Then this May, Jennifer Lopez and Ben Affleck slashed the price of their $60 million Beverly Hills megamansion by more than $8 million. Most recently, the billionaire founder of Oakley sunglasses became the latest victim of the sluggish luxury housing market by relisting his Beverly Hills mansion for $65 million, down from the original $68 million price listing from June 2024.These few examples go to show that while not fully out of a seller’s market, the tides are turning in favor of buyers as listings stay on the market longer and price cuts become more common, according to Realtor.com.“Square footage and celebrity status don’t justify inflated pricing anymore,” Anthony Luna, CEO of LA-based real-estate advisory Coastline Equity, toldFortune. “Buyers want smart design, upgraded systems, and long-term value.”Meanwhile, luxury buyers and sellers also have to contend with mansion taxes in some markets. The mansion tax in LA, for example, applies an additional 4% tax to property sales of at least $5 million and a 5.5% tax for properties north of $10 million, further complicating real-estate sales and pricing. The tax, which is typically paid by the seller, is separate from a home’s sale price and can be a “massive amount of money,” Selling Sunset star and Oppenheim Group agent Emma Hernan previously toldFortune. She described it as a “nightmare” for sellers and agents alike. One of the more recent examples of municipalities considering mansion taxes is Cape Cod. Already one of the most expensive housing markets in the U.S. where homes often exceed $1 million, according to Warren Buffett’s Berkshire Hathaway Home Services, it’s about to get more expensive for luxury homeowners. Cape Cod lawmakers are considering a tax on wealthy homeowners that would tack on an extra 2% surcharge on luxury-home sales above $2 million.Considering those factors, luxury homeowners will have to be more mindful than ever when pricing their properties. The reason there are so many price drops in the luxury sector is “they were mispriced in the first place,” Issacs said. “Everybody has an expectation of what their home is worth, and real estate brokers who are on the ground showing people every day have a better understanding of what people want, what people’s appetite is, and what things are spent on,” he said. “Some things they’re willing to spend [on], and some things they’re not.”Join us at the Fortune Workplace Innovation SummitMay 19–20, 2026, in Atlanta. The next era of workplace innovation is here—and the old playbook is being rewritten. At this exclusive, high-energy event, the world’s most innovative leaders will convene to explore how AI, humanity, and strategy converge to redefine, again, the future of work. Register now.
Nearly 70% of Americans think the economy is on the ‘wrong track’ and even more think it’s a bad time to buy a home, Fannie Mae survey shows
Sarah Jones
A growing sense of economic pessimism is taking hold in the U.S., as new Fannie Mae survey data reveals nearly 70% of Americans believe the economy is headed in the wrong direction. An even higher percentage (73%) say it’s a bad time to buy a house. Coupled with mounting concerns about the housing market, the findings underscore the challenges facing would-be homebuyers, and paint an increasingly bleak picture for consumer sentiment as autumn begins.Recommended VideoAccording to Fannie Mae’s September 2025 Home Purchase Sentiment Index, using data from the National Housing Survey, only 32% of respondents said the economy is on the “right track,” compared to a striking 67% who believe it’s going the “wrong track.” These numbers have shifted little during the past year, signaling a stubborn lack of faith in the nation’s economic trajectory, and the “wrong track” percentage ticked up from 64% in August. The steady majority express pessimism about the economy reflects ongoing turbulence from inflation, high borrowing costs, and the continued impacts of global events on U.S. households.This broad-based skepticism transcends the headline figures. Just 32% of consumers expect their personal finances to improve over the next year, while 23% anticipate things will get worse. Most people—45%—expect little change, which aligns with a record high share (77%) saying their household income has remained about the same as it was a year ago. Only 14% report significantlyhigher income, suggesting that wage gains are failing to keep pace with higher living costs and financial pressures, and yet only 8% report significantly lower income, indicating stability.Apollo Global Management Chief Economist Torsten Sløk weighed in on another explanation of the economy’s stagnancy on Tuesday, noting both the hiring rate and the quits rate are low, even at recessionary levels, with a declining number of job openings, rising unemployment, and slower job growth, to boot.“The bottom line is that the labor market is at a standstill, where workers are not getting hired or voluntarily changing jobs,” Sløk wrote.A bad time to buyFor aspiring homeowners, the outlook is especially grim. When asked whether it’s a good time to buy a home, just 27% said yes, while a resounding 73% think it’s a bad time. The net share of respondents who view buying conditions as favorable fell two percentage points month-over-month to negative 46%—a level that has persisted since the summer.Homebuyers’ attitudes toward the housing market today stem from stubbornly high mortgage rates and home prices. During the pandemic, buyers enjoyed sub-3% mortgage rates, which ushered in a wave of first-time homeowners. But by late 2023, mortgage rates had peaked at 8%, and today still remain near in the 6% range. And even a 0% mortgage rate wouldn’t make housing affordable for Americans in several major metro areas.Still, home prices are “the bigger hurdle,” Michelle Griffith, a luxury real-estate broker with Douglas Elliman based in New York City, previously told Fortune. Indeed, home prices are 51% higher than they were five years ago, according to the Case-Shiller Home Price Index.“The reality is that buying into the market especially in Manhattan or prime Brooklyn still requires a significant amount of cash upfront,” Griffith said. “Inventory is tight and competition is high, so the cost of the property itself is what keeps most buyers on the sidelines.”Recent HPSI data confirms Americans’ skepticism. Throughout 2025, the portion of those saying it’s a bad time to buy has hovered around 70%, several times higher than the share who feel now is a good time. Persistently rising home prices and steep mortgage rates have contributed to these negative perceptions, making affordability an ever-greater challenge for most buyers.Still a seller’s marketIn stark contrast to buyers, home sellers remain moderately optimistic. Fannie Mae found that 57% believe it’s a good time to sell their home, with only 41% saying it’s a bad time. This sentiment has declined compared to the previous year, where the net share of those seeing it as a good time to sell topped 30%; September’s figure stands at just 17%. Still, the “good time to sell” contingent outnumbers the buyers—reflecting continued seller’s market dynamics, even as perceptions soften.Looking ahead, 40% of survey participants expect home prices to rise in the next 12 months, while 22% believe they’ll fall, and 38% foresee stability. The net share predicting price increases is 18%—unchanged from August. Meanwhile, opinions are split on mortgage rates, with roughly a third expecting rates to go down and another third bracing for further increases. Notably, just 2% now believe mortgage rates will decline—down five percentage points from the previous month—indicating that expectations for relief on borrowing costs remain low.To be sure, there are some subtle signs the housing market could be shifting toward favoring buyers. Mortgage applications have slightly increased, and home prices are starting to plateau or even drop in some markets. “For prospective buyers who have been waiting on the sidelines, the housing market is finally starting to listen,” First American chief economist Mark Fleming wrote in an Aug. 29 First American post. Even if that’s true, Fannie Mae’s survey shows American homebuyers still feel as if the market isn’t in their favor.Plunging into rentalsOutside of the ownership market, the survey indicates renters believe costs will climb, with consumers expecting a 6% average increase in rental prices over the year ahead—a 1.1 percentage-point monthly jump. Employment confidence remains solid, with 75% of working respondents not concerned about job loss in the next year.The survey also found a slight rise in renting preference: if moving, 33% would choose to rent, up one point, while 67% would opt to buy. Additionally, 57% report that obtaining a mortgage today would be difficult—up slightly from the prior month—further confirming the affordability squeeze.The Fannie Mae data points to a sustained period of uncertainty and challenge for Americans. With most consumers wary about both the broader economy and their personal financial prospects, and with homebuying seen as increasingly out of reach, it is clear that deep anxieties about the nation’s financial trajectory are shaping everyday decisions and dampening optimism as fall gets underway.For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing. Join us at the Fortune Workplace Innovation SummitMay 19–20, 2026, in Atlanta. The next era of workplace innovation is here—and the old playbook is being rewritten. At this exclusive, high-energy event, the world’s most innovative leaders will convene to explore how AI, humanity, and strategy converge to redefine, again, the future of work. Register now.
The housing market’s fall surprise: Buyers are back, and Zillow says the momentum isn’t over yet
Emily Johnson
Zillow’s September 2025 housing market report reveals an unexpected surge of activity during what is typically real estate’s slow season. A dip in mortgage rates—combined with a strong stock market—sparked renewed energy among both buyers and sellers after a sluggish August.Recommended VideoNew listings climbed 3% year over year in September, reversing the 3% decline a month earlier. On a monthly basis, listings dipped 2%, outperforming the historical average of a 9% tumble heading into the fall.Total inventory slipped just 1% from August to September but sits 14% higher than last year’s levels.The report also shows a shifting balance of power: 15 of the nation’s 50 largest metros are now buyer’s markets, up from six last year.Zillow’s heat index names the top buyer-friendly metros:Miami, FloridaNew Orleans, LouisianaAustin, TexasJacksonville, FloridaIndianapolis, IndianaIn contrast, seller-leaning markets remain hot due to limited housing supply and restrictive land-use laws.The best seller’s markets named by Zillow include:Buffalo, New YorkHartford, ConnecticutSan Jose, CaliforniaSan Francisco, CaliforniaNew York, New YorkRecent nationwide data reinforces Zillow’s message of resilience. According to Freddie Mac, the average 30-year fixed mortgage rate has dropped to about 6.19%, its lowest point of 2025. Meanwhile, existing-home sales rose to a seven-month high in September as affordability began to improve. And even as 15% of pending sales were canceled amid nervous buyers, Redfin’s numbers show that sellers are adjusting expectations—making price cuts and accepting slower deals.Together, these trends suggest the housing market is thawing rather than overheating. Zillow’s economists expect this “unseasonably active” fall to carry into the holidays, powered by easing borrowing costs and pent-up demand. For buyers who’ve been waiting for a window, this may be the first real opening in nearly three years.For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing. Join us at the Fortune Workplace Innovation SummitMay 19–20, 2026, in Atlanta. The next era of workplace innovation is here—and the old playbook is being rewritten. At this exclusive, high-energy event, the world’s most innovative leaders will convene to explore how AI, humanity, and strategy converge to redefine, again, the future of work. Register now.
Housing costs are so high some Americans are delaying milestones like getting married, having kids and even adopting a pet
David Davis
Americans are sacrificing a lot just to be able to afford a roof over their head. Recommended VideoAccording to a recent Redfin survey, more than 44% of U.S. homeowners and renters said they struggle to afford their mortgage or rent payments. And because of that, they’ve been forced to forgo dining out at restaurants and taking vacations. But what’s more alarming is they’re delaying major life milestones like getting married and having children. That’s according to a Redfin-commissioned survey conducted by Ipsos in May of more than 4,000 U.S. homeowners and renters. That curtails with previous reporting fromFortuneshowing how high housing costs and other life expenses have forced Gen Z and millennials to delay the American Dream.“We’re shining a light on [these homeowners and renters] because they speak to the lengths people go to make their housing payments,” according to Redfin.Even though having pets became somewhat of the new craze for Gen Z and millennials who knew they couldn’t afford to have human children, that’s seemingly become too expensive on top of housing costs. Some people even report staying in a marriage or relationship longer than they wanted because they couldn’t afford housing plus a divorce or to live on their own.The following are sacrifices Americans have made in order to afford housing, according to the Redfin report:Moved in with parentsMoved in with other family membersMoved in with roommatesMoved in with a romantic partnerI had to give up my pet(s)Gave up or reduced college savings for their kidsDecided against or delayed having a childEnrolled my child(ren) in a low-rated schoolMoved in with my grown childrenPostponed getting a divorce or separationAnd it shows in more data: The housing market has become so unaffordable for Gen Z and millennials, the number of first-time home buyers shrank to a historic low. The number of first-time homebuyers in 2004 was nearly 3.2 million, according to NAR data shared withFortunein July Tuesday. By late 2024, that number had plummeted to just 1.14 million.“We’re seeing a reshaping of the housing ladder,” Alexandra Gupta, a real estate broker with The Corcoran Group, previously toldFortune. The firm was founded by Shark Tank star, investor, and real estate legend Barbara Corcoran. “Some first-time buyers are turning to long-term renting or even co-living models because the idea of owning a home has become so out of reach,” Gupta added, while others are relying on family support.Meanwhile, Americans continue to struggle with housing payments because the pace of wage growth doesn’t match the clip at which home prices are growing. Home prices in the U.S. are more than 50% higher than they were right before the pandemic, but incomes haven’t increased enough.To combat that challenge, many younger buyers are considering buying (or continuing to rent) with friends or family.“Young buyers are adapting out of necessity and out of determination. They’re willing to do whatever it takes to build equity and stability, even if that means approaching ownership in ways their parents never considered,” Niles Lichtenstein, cofounder and CEO of real-estate platform Nestment, toldFortune. “Co-buying is a reflection of both the constraints of the market and the ingenuity of this generation.”Join us at the Fortune Workplace Innovation SummitMay 19–20, 2026, in Atlanta. The next era of workplace innovation is here—and the old playbook is being rewritten. At this exclusive, high-energy event, the world’s most innovative leaders will convene to explore how AI, humanity, and strategy converge to redefine, again, the future of work. Register now.
In a frozen luxury housing market, buyers are asking to ‘try before you buy’ and having sleepovers in multimillion-dollar mansions
Emily Miller
Nearly 70% of Americans think the economy is on the ‘wrong track’ and even more think it’s a bad time to buy a home, Fannie Mae survey shows
Sarah Jones
The housing market’s fall surprise: Buyers are back, and Zillow says the momentum isn’t over yet
Emily Johnson
Housing costs are so high some Americans are delaying milestones like getting married, having kids and even adopting a pet
David Davis
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Young woman opens Yorkshire prom shop after own disastrous dress experience
A young woman who was left in tears buying her prom dress has launched her own shop in Yorkshire selling gowns for school leavers. Lia Brehmer’s prom plans were almost ruined when she was made to feel fat when shopping for her own frock, and she only went to the ball after her mother Donna Gadd found a dress with another supplier. Her mother was so incensed that she launched a dress business in Brighouse to make sure no teenagers goes through a similar experience. Now, seven years on, the firm has proved to be so successful that Ms Brehmer has opened a second Prom Den in Horsforth, to serve clients in Leeds and North Yorkshire. She said: “I remember the stress of prom night and how tough it can be finding the dress of your dreams which no other girl will be wearing on the night. I was so badly treated when I was preparing for my prom as a 15-year-old. I was a healthy size eight but the woman in the shop made me feel like I was fat and suggested we get a floaty dress to cover up my weight. "I was in tears and my mum was so angry that we went to another supplier. After that she set up her own prom dress shop so that no other girls went through the same experience." Most mixed schools in Yorkshire have proms to celebrate the end of the school year after GCSEs, a tradition picked up from the US where the prom has been part of the high school calendar for decades. Ms Brehmer said she didn’t hesitate to join the family business, and loves working with her mother. The average price of a dress is between £299 and £495 and the pair work closely with schools and social workers to support families and young people by giving away dresses to pupils who, without help, would not be able to experience prom. She said: “I was helping out in the Brighouse shop for years when I was growing up so I had a good mentor in mum. She had a very simple philosophy which was to make every girl feel special and I hope that I am continuing that tradition in the store in Horsforth. I give every girl who comes through the doors the wonderful prom experience that I never had. I won’t sell the same dress twice to the same school so no girl has to worry that their big night will be overshadowed by another pupil in the same outfit. “We make every girl feel special with their own individual stylist so that they get the dress of their dreams and feel like a princess. Prom season is here already with girls coming in thick and fast to secure their dream dress. Girls love sharing pictures on social media of their choices and we have special areas in the shop where they can shoot pictures and videos. “We have a dress in the shop which every girl signs to commemorate their prom year. We love seeing the girls sharing pictures of their big night on social media and we celebrate proms all over Yorkshire on our feeds with lots of those unforgettable images.” Ms Gadd said that business has been booming since she started seven years ago and she was keen to open a branch serving Leeds and North Yorkshire.
Hull's AA Jones Electric gets £1m backing through management buyout deal
A £1m funding package has been secured by wholesaler AA Jones Electric as part of a management buyout deal at the firm. The Venture Business Park business, which employs 20 people, has undergone a seven-figure management deal backed by investors Mercia Debt Finance. Co-founder and sales director Andy Moulds and long-standing employee Sam Lomax have taken control of the business, ahead of the retirement of co-founder Ian Wayman. Finance director Tony Moore, another co-founder, retains his stake in the firm and will continue in his role. Meanwhile Ms Lomax has become managing director. AA Jones Electrical began in 15 years ago and supplies electrical equipment for domestic and commercial use, as well as industrial automation and controls. In 2022 the firm acquired neighbouring Seltec Automation - a specialist in factory automation and building health and safety projects. Directors have secured a £1m funding package for the business, half of which has come from Mercia's SME Loans fund. The remaining £500,000 is intended to support post-buyout growth including the creation of five jobs in the next two years, and comes from Northern Powerhouse Investment Fund II-Mercia Debt Finance, which is managed by Mercia as part of the NPIF II. Ms Lomax said: "Tony and Ian have built a very successful business with a dedicated and experienced team. Having joined the company 13 years ago, I am very grateful for all the support and opportunities they have given me. I am proud to be taking on the role of managing director and look forward to working with Andy and the team as we continue to grow the business." Mercia Debt's Rebecca Pickering said: "AA Jones is well respected in the industry. It sets itself apart from the big chains by its customer service and knowledgeable staff and despite tough competition, has continued to grow revenues. We are pleased to have been able to be able to support the buy-out and provide funding for its future growth plans." Lizzy Upton, senior manager at the British Business Bank, said: "The future of the electrical industry is bright, with the likes of solar lighting and EV growing in popularity amongst consumers. It is great to see Yorkshire & Humber businesses like AA Jones Electrical making use of NPIF II funding to capitalise on this, supporting its future growth and supporting the Northern economy."
LSL Property Services sounds optimistic note amid profit upgrade and appointment of CEO designate
Property services group LSL has upgraded revenue and profit expectations for 2024 at the same time as appointing a new CEO designate. In a pre-close trading update, the Newcastle-based group, which includes brands such as Your Move and Reed Rains, said group revenue for 2024 is expected to be a 20% increase on the previous year at about £173m. Group underlying operating profit is also said to be "significantly ahead" of 2023 levels and above the board's expectations. LSL told shareholders that all three of its main divisions - financial services, surveying and valuation and estate agency franchising - had experienced growth. That included boosted operating margin of about 16%, compared with the group's normal 12% level. Its financial services network, which provides functions to mortgage intermediaries, saw profit increase year-on-year and its overall share of the UK housebuying and remortgage market increased to 11.6%. In the surveying and valuation business, better market conditions and contract extensions helped operating margin reach about 23%, compared with 9% in 2023. And across LSL's newly slimmed down estate agency franchising division, operating margin was at a record high of 28%, compared with 21% in 2023. Bosses also said there had been a material increase in profits in that part of the business. Coinciding with the pre-close statement, LSL announced that current chief financial officer Adam Castleton as its new CEO designate. The move comes ahead of David Stewart's retirement. Mr Castleton will take up the role in May following a handover period. Pending FCA approval, Mr Stewart will become a non-executive director of group companies within LSL's financial services network. Adrian Collins, non-executive chair, said: "We are immensely grateful to David, who during his tenure as CEO led the transformation of LSL to a higher margin, less capital-intensive business that will perform more consistently through market cycles. Under his leadership, we have simplified and restructured our Financial Services and Estate Agency businesses. Both are now focused on business-to-business services with a significantly lower cost base and the potential for higher free cash flow generation. "The board is very confident in Adam as the right person to lead LSL forwards, due to his detailed knowledge of our business, his breadth and depth of experience in corporate leadership and his close engagement with our investor community.
The housing market is no longer a wealth-building engine as home prices continue to slump
Michael Davis
Home prices aren’t keeping up with inflation, representing a drag on wealth in real terms, according to S&P Global. That’s as home prices have been falling on a monthly basis, while President Donald Trump’s tariffs have kept inflation sticky and still-high mortgage rates have weighed on demand.High home prices and mortgage rates have created unaffordable conditions for many Americans, but the housing market’s ability to create more wealth has sputtered.Recommended VideoThat’s because even as home prices continue to hover around record levels, they are also edging lower and lagging behind the rate of inflation, which has heated up amid President Donald Trump’s tariffs.“For the first time in years, home prices are failing to keep pace with broader inflation,” said Nicholas Godec, head of Fixed Income Tradables & Commodities at S&P Dow Jones Indices, in a statement on Tuesday. The last time that happened was mid-2023.The latest S&P Cotality Case-Shiller home price data showed that the 20-city index fell 0.3% in June from the prior month, marking the fourth consecutive monthly decline.On an annual basis, the 20-city composite was up 2.1%, down from a 2.8% increase in the previous month, and the national index saw a 1.9% yearly gain, down from 2.3%. Meanwhile, the consumer price index rose 2.7% in June from a year ago.“This reversal is historically significant: During the pandemic surge, home values were climbing at double-digit annual rates that far exceeded inflation, building substantial real wealth for homeowners,” Godec added. “Now, American housing wealth has actually declined in inflation-adjusted terms over the past year—a notable erosion that reflects the market’s new equilibrium.”Weak prices suggest underlying housing demand remains muted, he said, despite the spring and summer historically being the peak period for homebuying.In fact, this year’s selling season has been a bust. While sales of existing homes have ticked up recently, they are still subdued and prices are flat. In addition, sales of new homes are slumping with prices down.Conditions have been so dire that Moody’s Analytics chief economist Mark Zandi sounded the alarm on the housing market even louder last month.In Godec’s view, the recent shift in the housing market could represent a new normal—but one that also has a positive angle.“Looking ahead, this housing cycle’s maturation appears to be settling around inflation-parity growth rather than the wealth-building engine of recent years,” he said.That’s as pandemic-era hot spots in the Sun Belt have cooled off with demand increasingly tilting toward established industrial centers that enjoy sustainable fundamentals like employment growth, greater affordability, and favorable demographics.“While this represents a loss of the extraordinary gains homeowners enjoyed from 2020-2022, it may signal a healthier long-term trajectory where housing appreciation aligns more closely with broader economic fundamentals rather than speculative excess,” Godec added.Meanwhile, analysts at EY-Parthenon sounded gloomier about the housing market in a report that also came out on Tuesday, predicting that home prices will turn negative on an annual basis by year-end due to low demand and rising inventories.Home listings are up 25% from a year ago, and inventories have risen for 21 consecutive months. Homebuilders are also cautious given that demand is under pressure and construction costs are still elevated.“Looking forward, the housing market is expected to stay stagnant, as slowing income growth and persistently high borrowing costs continue to limit demand,” the EY report said. “While proposed changes to the regulatory environment can help improve builder sentiment, elevated construction costs due to higher tariffs along with ample inventories will continue to constrain construction activity.”Join us at the Fortune Workplace Innovation SummitMay 19–20, 2026, in Atlanta. The next era of workplace innovation is here—and the old playbook is being rewritten. At this exclusive, high-energy event, the world’s most innovative leaders will convene to explore how AI, humanity, and strategy converge to redefine, again, the future of work. Register now.
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