Monday property news update - 26 April
Summer holidays, the roaring twenties and back to work but nowhere to live
4 minutes to read
Summer holidays
Fully vaccinated American tourists will be able to visit the European Union this summer, EU Commission president Ursula von der Leyen told the New York Times yesterday.
The interview offers the clearest guidance to date on proposed vaccine passports, which are likely to be low-tech to begin with - travellers to Europe may be able to receive a vaccine certificate on arrival if they have one issued by their own government, though plans are still being finalised. Ms von der Leyen was referring to tourists from the US, though adds that the EU plans to accept "unconditionally" all those who are vaccinated with vaccines that are approved by European Medicines Regulator.
That includes all three vaccines being used in the United States, namely the Moderna, Pfizer/BioNTech and Johnson & Johnson shots, but also the AstraZeneca jab developed in partnership with Oxford University. The US is on track to reach herd immunity, or the vaccination of 70 percent of adults, by mid-June.
More than half of the UK population have now had at least one shot and those aged 40-44 will be invited to book slots this week. Flight booking platform Skyscanner tells The Times that UK holiday departures through September, October and November are already ahead of 2019-levels.
Tracking the recovery
In an interview with the Telegraph over the weekend, Bank of England deputy governor Ben Broadbent said it may be too soon to call a “Roaring Twenties” scenario, but the data suggests “very rapid growth at least over the next couple of quarters.” Mr Broadbent cites the circa £150 billion of excess savings waiting to be spent, adding that it's "possible" consumers will spend more than the Bank of England's forecast 5%.
New card data from Barclays suggests total spending was 15% above pre-Covid levels in the first week of the reopening phase. The Telegraph also cites mobile phone data from Apple and Citymapper that indicates that movement in cities has almost reached the post-Covid highs of last September.
A new edition of Deloitte's closely-watched confidence tracker shows a record quarterly rise in consumer confidence in the first three months of the year. The responses from more than 3,000 UK consumers surveyed between March 19 and 22 point to a “sharp snap-back” in consumer activity. Meanwhile Stephen Springham has this update on the latest ONS retail figures.
The return to work
The number of tenants searching for rental properties is rising as the successful vaccination programme paves the way for a return to the office. The problem they face is a shortage of supply.
Family houses to let in prime locations in London and the south-east are increasingly scarce as owners decide to capitalise on a resurgent sales market. UK sales transaction numbers hit a 15-year high last month and prime markets were no exception. While there is a general over-supply of rental properties in London and the south-east, the same is not true for houses in prime locations with outdoor space, according to new analysis from Tom Bill.
We've seen similar shortages hit Premier League footballers. In the corporate world, the shortage is most acute for houses between £2,000 and £4,000 per week, according to Tom.
Cladding
A report in the Sunday Times this weekend revealed the Prudential Regulation Authority - the arm of the Bank of England that monitors risks to the financial system - has questioned mortgage-lenders on their exposure to leasehold flats and blocks with fire risks. Initial analysis by the PRA has concluded banks can absorb losses on the circa 1.3 million flats that are now unmortgageable.
A study by the Leasehold Knowledge Partnership (LKP) found four in five of auctioned fire-risk flats had failed to sell or were discounted by as much as two thirds in a random sample.
The piece also carries polling of 101 MPs by YouGov and the National Housing Federation that found three quarters believe the government should fund building safety repairs.
In other news...
Understanding how Environmental, Social and Governance factors feed commercial property valuations will be key driving sustainable property investing. Find out what ESG means in the context of valuation, the risks imposed by ESG at different stages of building lifecycles, as well as how Knight Frank are reflecting ESG considerations in valuations in a webinar this Thursday at 9am. Register here.
Plus, Chris Druce on rising housing market activity and tightening supply in Scotland and a new Rural Update from Andrew Shirley on farming’s sustainable future.
Finally, PWC predicts the EU 'needs London' and will sign a post-Brexit City deal, UK and European banks plan to slash business trips after the pandemic, Barclays told to stop lending to fossil fuel companies, Hong Kong is becoming Shenzhen's backyard in the eyes of property developers, Lego heirs’ $20 billion fund says the future of offices is unclear, and, wealthy Americans hunt for ways around Biden's tax hikes.
Photo by Piper McCorkle on Unsplash