Your daily market update from Knight Frank Research, Thursday 16th April

Economic headlines

Britain is reaching the peak of the coronavirus pandemic and will be able to finalise its strategy for easing the lockdown within ten days, according to chief medical officer Chris Whitty.

In the meantime Dominic Raab, the foreign secretary, is expected to announce today that lockdown restrictions will remain in place for a further three weeks.

Other European nations including France and Italy have started easing restrictions. German Chancellor Angela Merkel said yesterday some smaller shops could reopen next week and schools could gradually restart in early May. President Donald Trump will today announce guidelines to reopen the US economy.

One report has suggested that in the UK, estate agents should be amongst the first businesses to reopen, alongside coffee shops and restaurants. 

The dollar climbed and stocks dipped overnight after US retail sales and factory output posted historic declines in March. The dollar has climbed almost 6% against the pound since the start of the year.

Property market headlines

One in five property sales underway in London when the Covid-19 pandemic struck have fallen through, meaning the vast majority of buyers and sellers have held their nerve, writes Tom Bill. So-called “Coronavirus Event” clauses have been written into contracts to protect buyers and sellers from claims that may arise due to Covid-19-induced delays. 

Banks have cut the number of mortgage products available by 50% as they grapple with the effects of the outbreak. While some are tightening their criteria, in many cases cutting the multiple of a borrower's income they are willing to lend, others continue to gain market share by lending at loan-to-value ratios of up to 90%, according to Knight Frank Finance.

The UK government is in talks with developers over plans to extend Help to Buy as part of a strategy aimed to kick start development once the lockdown eases. 

Our analysis of luxury asset markets continues with Andrew Shirley's analysis of rare whisky released this morning. Though prices climbed in the first quarter, the cancellation of a number of auctions has seen the volume of whisky sold drop for the first time in 10 years. 

Andrew also checks in on HS2. Yesterday, the green light for detailed design and construction to start was given to the four main joint-ventures created to build the line.

Stepping back

We continue our investigation of longer-term themes from our recently launched flagship reports, all of which shine a light on problems and solutions brought about by the Covid-19 crisis.

From The London Report, Faisal Durrani explores: the role of the office following the imposition of mass remote-working; overseas investment amid travel restrictions; and finally Faisal takes a look at why the green agenda will transcend short term economic and geopolitical challenges.

If you have any questions, please contact me, or the team.