The St Moritz surge, mortgage rate hikes and who is going to install 90,000 heat pumps?
Making sense of the latest trends in property and economics from around the globe.
3 minutes to read
Green homes
Retrofitting homes is the unsexy climate fix the world needs, so say Bloomberg this morning, and right on cue the UK government has published its long-awaited plan to decarbonise the nation's stock of existing homes.
This part of the government’s green strategy was always going to be difficult as well as unsexy – and there are significant hurdles ahead. The headline plans include bringing the cost of heat pumps into line with gas boilers via grants while incentivising mortgage lenders to 'green' their mortgage books.
There was no date set for an outright ban on gas boilers, so there is more carrot than stick, but the incentives look modest compared to the scale of ambition. Mortgage lenders have known this was coming for some time - the government published its consultation almost a year ago - yet the green mortgage market remains nascent and discounts are in the hundreds rather than thousands of pounds, according to Simon Gammon of Knight Frank Finance.
The government will provide £450 million in order to encourage the installation of 90,000 heat pumps over the next three years, while also setting a 2035 target for all new heating systems to run on low carbon technologies or fuels. The Heat Pump Association estimates 60,000 workers will be needed to install the devices by 2028 but only 1,800 people currently have the right training.
Ski Property
Knight Frank’s annual Ski Property Report, published this week, includes our annual rankings of annual price growth in the world's ski resorts. Swiss resort St Moritz tops the list this year, with growth of 17%.
A shortage of stock and strong demand has had an inevitable impact on pricing. In June 2020, 90 ski homes were available to buy in the resort, a year later there were close to 20.
Swiss resorts lead the Ski Property Index for the first time in three years, in part because the pandemic has highlighted the advantage of Swiss Independence. The country’s ability to set its own travel rules, its decision to reopen its ski resorts in December 2020 (the only European country to do so), and its overall response to the pandemic has bolstered its appeal.
Supply constraints will ease as the Covid-19 landscape starts to normalise, so the frenetic pace of growth is likely to slow, according to Kate Everett-Allen. Meanwhile, the French Alps look set for a busy winter. Chamonix (price growth of 6.1%) and Megeve (4.7%) proved to be France’s frontrunners, due primarily to their relative value and ease of access.
Mortgages
We talked on Monday about two high street lenders opting to hike rates on their low LTV, long-term mortgages in what could be the beginning of the end for the mortgage price war.
Well, a tally by the Telegraph reveals Platform, part of the Co-operative Bank, Barclays, HSBC and Natwest have now all notched up the cost of their most attractive products. The number of fixed-rate sub-1% mortgages has fallen from 131 to 116 in the past two weeks, according to Moneyfacts.
Edinburgh
Edinburgh's property market regained its momentum quickly after the reopening in June 2020 after more than two months of closure. Price growth picked up as local families looked to upsize and new arrivals from other parts of the UK sought out a change in lifestyle.
New data from Chris Druce reveals price growth dipped to 2% in the third quarter, down from 2.3% in the previous three-month period. That caps annual growth at 8.5%.
Houses continued to outperform flats in the third quarter as buyers prioritised space, with an average increase of 2.6% and 1.1% respectively. Meanwhile price growth in Scotland's country house market moderated to 1% in Q3, from 5.5% three months earlier.