Midweek property news update
Confiscating the ESG punchbowl, retreating to private islands and forecasts for the global recovery
3 minutes to read
An attempt to break up the ESG party
In the Wealth Report earlier this year, I talked about the need for clarity and transparency when it came to definitions and measurement of Environmental, Social and Governance (ESG) investment criteria.
Critics argued asset managers were happily labelling funds as ‘green’ or ‘sustainable’ with little oversight, and the record-breaking speed at which cash was flowing into these self-titled funds was outpacing progress towards a unified approach to an assessment of their benefits.
In a new article published this morning, I take a closer look at an attempt by the US Department of Labor to break up the party, and consider what Biden and Brexit might herald for the future sustainable investing. Have we succeeded in measuring the economic benefits of 'feel good' investing? And with global regulators now driving change, does that even matter?
A gradual global recovery?
New OECD forecasts published yesterday plot the most likely trajectory of the recovery through to the end of 2022, though it says an expected 4.2% expansion in global GDP during 2021 could be accelerated by a speedy roll out of vaccines.
You'll need to sign up for the full report, however the FT has a write up here. By the end of next year, the forecasts indicate that China’s economy is likely to be almost 10 per cent larger than at the end of 2019.
Europe and the US will both lag behind Asian countries that managed to cushion the impact of the pandemic, though the US is expected to regain its lost output by the end of next year. Of Europe's largest economies, only Germany will come close to regaining its pre-pandemic scale by the end of the forecast period.
Tracking the surge
Two significant pieces of property market data released this week reveal the size and scope of the continuing property market surge.
On Monday the Bank of England said lenders had issued 97,500 mortgages for house purchase during October, more than any month since September 2007. Then yesterday Nationwide said UK house prices climbed 6.5% during the year through November, the highest rate of growth since January 2015.
Simon Gammon of Knight Frank Finance tells the FT the nation is engaged in a mass rethink over where to live following two lockdowns and activity has been particularly strong in countryside markets as buyers seek better access to green space. Lenders are now preparing for a wave of new mortgage applications as buyers try to squeeze deals through the system ahead of the end of the stamp duty holiday in March.
From Hampstead to holiday homes and private islands
The search for space is impacting property markets globally. The ultra wealthy are turning holiday homes and private islands into more permanent bases for working and studying.
Meanwhile, in London's super prime lettings market, where qualifying properties rent for more than £5,000 a week, Hampstead became the third most popular location for tenancies agreed in the year to September, with the number of deals rising to 12 from 5 in the previous year.
Tenants are prioritising home gyms over gym membership and placing more priority on outdoor space. However, if they are moving outside the capital, they need to know they can get back quickly and many are adding a place in the country rather than replacing their London base, says Tom Smith, Knight Frank's head of super-prime lettings.
In other news...
Anna Ward tracks Coventry's rise as a property investment hotspot.
Plus, rental collection in the UK PRS sector averaged 94.9% in October, up to 2,000 rooftop homes could be built across Southwark, trends to monitor in prime global property markets, reinventing workers for the post-Covid economy, US inflation expectations hit 18-month, factory floors keep global economy chugging along, Brexit negotiators race to strike a deal by the end of the week, and finally, the FTSE is on the march after big US banks issue call to buy British.