Knight Frank Daily Update Friday 3rd July
What does a new development in London reveal about the property market?
3 minutes to read
Good morning,
Need to know
Stock markets continue to rally as investors take a view on the persistent march of the virus against what is becoming a steady flow of positive economic news.
Some 38 US states reported an increase in new cases during the past fortnight, prompting 13 to pause plans to reopen.
Meanwhile, US employers brought back 4.8 million jobs in June, the second month of strong gains, the Labor Department said yesterday.
After rapid action on the recent outbreak in Beijing, the Chinese economy continues to improve. The services sector expanded at the fastest pace in over a decade during June.
The recovery also appears to be gathering pace in the UK.
Employers are stepping up recruitment drives for bar and service staff ahead of tomorrow's reopening, consumers' views on their personal finances are improving, and a raft of measures from public transport use, electricity and flights data tracked by the investment bank Jefferies indicates Britain’s economy is regaining momentum as the lockdown is lifted.
At this stage, signs of recovery are revealed by incremental improvements from record drop offs in activity during April and May.
The UK’s debt to GDP ratio has risen above 100% for the first time in its history and some sectors will take longer to recover while unemployment is likely to rise. Factories, for example, are likely to make layoffs over the coming months.
Today we'll see the full list of as many as 75 countries from which visiting travellers will no longer be required to quarantine, raising the prospect of overseas summer holidays as those countries reciprocate.
Finally, after four days of intensive talks in Brussels, EU task force head Michel Barnier said “serious divergences remain” between the UK and EU positions on Brexit.
As has so often been the way with this process, the write ups following post-negotiation briefings reveal more. Bloomberg reports that officials are beginning to coalesce around a general “landing zone” that could form the basis of an agreement on trade and other areas of cooperation.
The FT interprets Barnier's comments as an indication he is ready to accept Britain’s rejection of the European Court of Justice.
The property market
As the first major development to launch post-lockdown, we've been closely watching sales at the first phase of Catalyst and Mount Anvil's The Verdean for clues as to the state of demand for London's new homes in the wake of the crisis.
The outturn has been positive with 90% of the available homes being reserved within three days of launching on 23rd June, four years ahead of completion.
In a sign that optimism among developers nationwide is improving, Energy Performance Certificates issued to new homes - a key leading indicator for new house building - increased in May and June, following a sharp drop in April.
The latest analysis from Tom Bill suggests balance between buyers and sellers has returned to UK property markets, creating the conditions for a more sustainable post-pandemic recovery.
After an initial burst of demand following the re-opening of the housing market on 13 May, the number of new sellers has risen and the ratio between supply and demand has normalised.
Mengjie Shi has the latest on the property markets Asian investors are targeting, and Flora Harley delves into the latest global economic indicators for clues as to the trajectory of the recovery.
This week on Intelligence Talks, Will Matthews chats with Andrew Shirley and Alex James, head of private client commercial advisory, about the rise of private investors, and the scope of their appetite for deals in light of market volatility. Listen on Apple, Spotify and Acast.
If you have any questions, please contact me, or the team.