•• The Guardian Saturday 30 April 2022(^52) Financial
House price growth declines as
cost of living crisis hits market
Mark Sweney
House prices have continued to climb
in April but the rate of growth is slow-
ing as soaring infl ation and the cost
of living crisis start to aff ect the mar-
ket, fi gures show.
The average amount paid for
a home in the UK was up 0.3% to
£267,620 in April on a month earlier,
Nationwide found, the ninth consec-
utive month of growth.
However, the rate of house price
growth has slowed from a 1.1% rise
in March and is the smallest increase
since September last year, according
to the monthly property index from
the building society. On an annual
basis house prices are up 12.1% year
on year, a modest slowdown com-
pared with 14.3% in March.
The boom has been fuelled by a
shortage of housing stock and a pan-
demic-fuelled hunt by city dwellers
for larger houses, gardens and more
rural living. However, Nationwide
believes the market will slow as
household budgets are squeezed and
mortgages become more expensive.
“It is surprising that conditions
have remained so buoyant, given
mounting pressure on household
budgets, which has severely dented
consumer confi dence,” said Robert
Gardner , the chief economist at
Nationwide.
“We continue to expect the
housing market to slow in the
quarters ahead. The squeeze on
household incomes is set to intensify,
with infl ation expected to rise fur-
ther, perhaps reaching double digits
in the quarters ahead if energy prices
remain high. Moreover, assuming
that labour market conditions remain
strong, the Bank of England is likely
to raise interest rates further, which
will also exert a drag on the market if
this feeds through to mortgage rates.”
The average price of a UK home
has risen by almost £50,000 since
the start of the coronavirus pan-
demic in March 2020, according to
Nationwide.
It said that given the shift in con-
ditions, it was striking that a survey
cheap mortgages is closing rapidly
and the spectre of higher interest
rates means that mortgage rates are
likely to return to levels we haven’t
seen in a while. The property market
remains tough for homebuyers and
is set to get tougher from an aff orda-
bility perspective.”
Nationwide said that despite
mounting pressure on household
fi nances, the proportion of people
moving or considering a move was
higher than during the height of the
pandemic in April last year.
“The survey results suggest that
shifts in housing preferences as a
result of the pandemic are continuing
to support housing market activity,
though to less of an extent than at this
time last year,” said Gardner.
About a quarter (24%) of those
moving or considering a move said
they planned to move to a larger prop-
erty, about the same proportion as
last April. However, the proportion of
those citing a desire to get away from
the hustle and bustle of urban life or
to get access to a garden or more out-
side space has declined to 12% and
15% respectively, down from 25% and
28% last April.
“Let’s be honest, growth slow-
ing from 14% to 12 % is still an insane
rate of growth,” said Rhys Schofi eld,
managing director at Peak Mortgages
and Protection. “What we may see
is some of the lunacy around house
price rises ease off. ”
Musk sells
$8.5bn of Tesla
shares to fund
Twitter deal
Dan Milmo and Mark Sweney
Elon Musk, the world’s richest man,
has sold $8.5bn (£6.8bn) worth of
shares in Tesla as he raises cash after
reaching a deal to buy Twitter.
The Tesla chief executive has com-
mitted $21bn of his own money to
the funding package for acquiring
the social media platform, which he
agreed to buy for $44bn on Monday.
Since then Musk has sold 9.6m
Tesla shares, or about 5.6% of his
stake in the business, according to
fi lings with the US fi nancial regulator.
Musk did not confi rm the purpose
of the sale but announced in a tweet
on Thursday that he planned no fur-
ther sales of shares in the electric
carmaker “after today”.
Tesla stock fell sharply on Tues-
day – wiping $126bn off the value of
the company – amid investor concern
that Musk would offl oad stock.
After the latest share sale, Musk’s
Tesla stake is worth about $147bn and
he remains the largest shareholder
with a stake of about 15.6%.
Alongside $21bn of his own cash,
Musk is borrowing $12.5bn to fund
the takeover. A bank consortium
led by Morgan Stanley is providing
a further $13bn. It was not immedi-
ately clear how Musk would raise
the remaining equity fi nancing. He
holds a 43.6% stake in unlisted rocket
company SpaceX, which is reportedly
valued at $100bn. Musk’s current
wealth is about $250bn, according
to the Bloomberg billionaires index.
The share sales were confi rmed
as a report said Musk could charge
websites a fee for quoting viral tweets
from verifi ed Twitter accounts if he
completes the acquisition.
He is also considering slashing
executive pay and has a new chief
executive lined up to replace the
incumbent, Parag Agrawal.
The Reuters report added that
Musk does not have confi dence in
Agrawal and has an as-yet-unnamed
candidate in mind to replace him.
Agrawal replaced Jack Dorsey, Twit-
ter’s cofounder, last year but is to
leave when the sale completes.
The $13bn loan is equivalent to
seven times Twitter’s 2022 pro-
jected earnings before interest, taxes,
depreciation and amorti sation.
The sale of 9.6m shares, at prices
ranging from $872 to $999 a share,
were the fi rst by Musk since a spree
last year that raised more than $16bn.
Source: Nationwide house price index
UK house price growth
is starting to slow
Annual % change
April
2020
October
2020
April
2021
October
2021
April
2022
-4
4
8
12
16
0
Airbnb scraps
location-based
pay and tells
staff to work
where they like
Alex Hern
Technology editor
Airbnb staff will be able to work from
almost anywhere they want and will
not have their pay docked if they
move outside metropolitan areas,
the company has announced.
The new model will apply to staff
in the US, the UK and other coun-
tries. To make it work, Airbnb said
it would focus in-person collabora-
tion on quarterly get-togethers and
aim to bundle work into two prod-
uct releases a year, its chief executive
and co-founder, Brian Chesky , said.
“We want to hire and retain the
best people in the world (like you),”
Chesky wrote in an email to staff. “If
we limited our talent pool to a com-
muting radius around our offi ces,
we would be at a signifi cant dis-
advantage. The best people live
everywhere, not concentrated in one
area. And by recruiting from a diverse
set of communities, we will become
a more diverse company.
“Now, I understand the anxiety of
not seeing people in an offi ce – how
do you know if your employees are
doing their jobs when you can’t see
them? For me, it’s simple: I trust you,
and fl exibility only works when you
trust the people on your team.”
Employees will not be entirely
free to move as they see fi t. For tax
reasons, they will need to have a per-
manent base in the country they are
hired in. If they work overseas, they
have been told they can spend no
more than 90 days a year in any given
country, and are responsible for han-
dling their own work authorisation.
And they still need to consider time
zones, and think about how to get to
the gatherings.
Crucially, however, the company
will no longer pay people based on
regional diff erences. “Starting in
June, we’ll have single pay tiers by
country for both salary and equity,”
Chesky said. “If your pay was set
using a lower location-based pay tier,
you’ll receive an increase in June.”
Other companies that have
embraced remote working have
been less generous. Google, Amazon,
Apple, Facebook and Microsoft all ask
employees to take a pay cut if they
move somewhere with a substan-
tially lower cost of living.
Airbnb is recovering from a diffi -
cult pandemic. The company, wh ose
bookings plummeted as international
travel fell away, laid off a quarter of
its workforce in May 2020 , scaling
back investments in hotels and ultra-
luxury apartments and pausing plans
to move into transport and content
creation. The business went public in
December 2020 but has maintained
a market capitalisation of about
$100bn in the 18 months since.
found 38% of respondents stated
they were either in the process
of moving or considering a move.
The proportion was particularly high
in London, where almost half said
they were moving or considering a
move.
“The stubbornly hot housing
market is showing signs of cooling,”
said Myron Jobson , a senior per-
sonal fi nance analyst at Interactive
Investor. “Mortgage aff ordability is
a growing concern. The window for
▲ Airbnb staff will have some limits
on where they live, with tax rules
requiring them to keep a permanent
base in the country they were hired in
PHOTOGRAPH: SU ARSLANOGLU/GETTY IMAGES
‘If we limit our talent
pool to a commuting
radius we would be
at a disadvantage’
Brian Chesky
Airbnb chief executive
▲ Elon Musk reportedly has a CEO
lined up to replace Parag Agrawal