London stocks were steady in early trade on Tuesday as investors mulled a slowdown in UK house price growth amid a lack of direction.
At 0830 GMT, the FTSE 100 was flat at 9,703.08.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: "The FTSE 100 is struggling to find momentum in the early days of December - not so much a sign of weakness as a lack of catalysts to drive the next leg higher. Against that backdrop, UK banks are offering a dose of optimism this morning in what's turning out to be a good couple of weeks for the major lenders.

"The UK's seven biggest banks sailed through the latest stress test, reaffirming their resilience and earning a regulatory nod to ease capital buffers. Most banks already hold capital well above the minimum by choice, so any shift in strategy may take time - but in theory, it frees up extra capital for lending or capital returns.

"However they use the new freedom, this is another clear signal that the UK banking sector is in robust health. This was largely expected, but the confirmation should still be taken well, especially after dodging tax hikes in last week's Budget. UK banks have been on a tear over the past two years from deeply depressed levels - valuations aren't as cheap anymore, but there are still some solid catalysts in play and the potential for strong shareholder returns ahead."

The latest data from Nationwide showed house prices continued to rise in November, although the pace of growth eased slightly.

House prices grew by 1.8% year-on-year, down on October's 2.4% spike but ahead of expectations for a 1.4% uplift.

Month-on-month, seasonally adjusted growth was 0.3%, also ahead of consensus, for 0%.

The average house price now stands at £272,998.

Robert Gardner, Nationwide's chief economist, said: "Against a backdrop of subdued consumer confidence and signs of weakening in the labour market, this performance indicates resilience, especially since mortgage rates are more than double the level they were before Covid, and house prices are close to all-time highs."

In last month's Budget, chancellor Rachel Reeves announced a council tax surcharge for properties valued at more than £2m. However, Gardner said the so-called mansion tax was unlikely to have a "significant" impact on the housing market.

"The surcharge, which is not being introduced until April 2028, will apply to less than 1% of properties in England, and around 3% in London," he noted.

Looking forward, Nationwide said housing affordability was set to to improve "modestly", should income growth continue to outpace house price growth, as expected.

Gardner said: "Borrowing costs are likely to moderate a little further, if Bank Rate is lowered again in the coming quarters.

"This should support buyer demand, especially since household balance sheets are strong."

Investors were also mulling the latest shop price monitor from the British Retail Consortium and NIQ, which showed that shop prices fell in November as retailers started to launch their Black Friday deals and promotions.

Inflation decreased to 0.6% last month year-on-year, from 1% in October.

Non-food inflation fell to -0.6%, but food inflation - which has soared this year - was also lower. It came in at 3%, down on October's 3.7% and below the three-month average, also for 3.7%.

Fresh food inflation was 3.6%, down from October's 4.3%, while ambient food inflation softened to 2.4% from 2.9%.

Helen Dickinson, BRC chief executive, said: "Black Friday deals began earlier than normal, as competition between retailers hit fever pitch.

"While food price inflation remains elevated, widespread promotions mean price rises eased over the month, especially in dairy, fruit, breads and cereals.

"With Budget uncertainty behind us, retailers are hoping that consumer confidence rebounds in this crucial trading period."

However, Dickinson acknowledged that sector headwinds remained, including rising employment costs, "which are likely to filter through to prices" in the new year.

"This could shake already weak consumer and present further challenges for consumers in the year ahead," she said.

In equity markets, Persimmon and Taylor Wimpey were both high risers after an upgrade to 'outperform' from 'sector perform' by RBC Capital Markets. In a broader note on the UK housebuilding sector, RBC said the vital statistics of the housing market are in good shape.

"Mortgage approvals for house purchase and housing transaction levels suggest a normal market and house prices are surprisingly stable," it said. "The UK housing market, like many of us, has been fitter in the past, but it is certainly a long way from being on life support."

Ladbrokes owner Entain was in the black after an upgrade to 'overweight' from 'neutral' at JPMorgan.

Victrex shot to the top of the FTSE 250 as the polymers group said it has launched a "profit improvement plan" targeting £10m of savings, after underlying earnings dropped 21% over the 12 months to 30 September.

On the downside, precious metals miner Fresnillo and gold miner Hochschild both lost their shine as gold prices fell back.

Market Movers

FTSE 100 (UKX) 9,703.08 0.01%
FTSE 250 (MCX) 22,011.01 -0.04%
techMARK (TASX) 5,532.24 0.03%

FTSE 100 - Risers

Persimmon (PSN) 1,357.00p 2.03%
Entain (ENT) 799.80p 1.63%
SSE (SSE) 2,230.00p 1.09%
Marks & Spencer Group (MKS) 351.10p 1.04%
Tesco (TSCO) 457.30p 0.95%
Metlen Energy & Metals (MTLN) 44.00p 0.92%
Rolls-Royce Holdings (RR.) 1,046.00p 0.87%
CRH (CDI) (CRH) 9,098.00p 0.86%
Sainsbury (J) (SBRY) 326.20p 0.80%
Land Securities Group (LAND) 605.00p 0.75%

FTSE 100 - Fallers

Fresnillo (FRES) 2,748.00p -2.55%
Burberry Group (BRBY) 1,140.00p -2.23%
Croda International (CRDA) 2,689.00p -1.43%
Whitbread (WTB) 2,431.00p -1.38%
Flutter Entertainment (DI) (FLTR) 15,560.00p -1.11%
JD Sports Fashion (JD.) 76.90p -1.06%
International Consolidated Airlines Group SA (CDI) (IAG) 389.40p -1.04%
easyJet (EZJ) 488.60p -0.99%
Pearson (PSON) 987.80p -0.78%
Rightmove (RMV) 540.60p -0.70%

FTSE 250 - Risers

Victrex plc (VCT) 675.00p 8.17%
Oxford Instruments (OXIG) 2,065.00p 4.72%
AO World (AO.) 111.80p 3.90%
Bluefield Solar Income Fund Limited (BSIF) 72.20p 3.14%
Hilton Food Group (HFG) 524.00p 2.54%
C&C Group (CDI) (CCR) 131.20p 2.50%
Taylor Wimpey (TW.) 103.20p 1.98%
Mitchells & Butlers (MAB) 288.50p 1.94%
Hammerson (HMSO) 325.60p 1.75%
TR Property Inv Trust (TRY) 328.50p 1.39%

FTSE 250 - Fallers

Ithaca Energy (ITH) 167.90p -4.82%
Foresight Group Holdings Limited NPV (FSG) 449.00p -2.71%
CMC Markets (CMCX) 283.00p -1.91%
Big Yellow Group (BYG) 1,068.00p -1.66%
Harbour Energy (HBR) 206.80p -1.62%
Telecom Plus (TEP) 1,492.00p -1.58%
Oxford Nanopore Technologies (ONT) 137.00p -1.51%
Hochschild Mining (HOC) 411.80p -1.44%
Ocado Group (OCDO) 175.15p -1.41%
Kainos Group (KNOS) 1,031.00p -1.34%