Knight Frank Daily Update Monday 6th July
A stamp duty holiday and what's really happening to house prices in London
3 minutes to read
Good morning,
We initiated the Knight Frank Daily Update at the onset of the Covid-19 crisis, to ensure we were able to offer you the most up-to-date information. As the economy begins to reopen we are eager to get your view on how the note might evolve from here - please share your thoughts via this short one minute survey.
Need to know
The UK Chancellor Rishi Sunak will reveal plans this week to lift the threshold at which people start paying stamp duty from £125,000 to as much as £500,000.
The change, which is expected to be implemented in the autumn budget, is a temporary measure intended to boost the housing market - predominantly for young people likely to bear the brunt of the Covid-19 crisis.
Back in April we said a material cut in stamp duty or an extended SDLT holiday should be central to efforts to revive the market in the wake of the shut down. The measure would provide a welcome boost to transactions at the lower end, although it stops short of the comprehensive rethink required to reduce the distortive effect SDLT currently has on property markets nationwide.
Royal Dutch Shell has hinted that it may move its headquarters from the Netherlands to the UK to simplify its complex capital structure.
A move to the UK would be a second vote of confidence in as many months after Unilever said it would merge its British and Dutch holding companies into one based in London.
British new car registrations fell by a third on an annual basis in June - a smaller drop than in April, when they were down 97%, and May, when they were down 89%.
Britain is close to a £500 million supply deal with Sanofi and GlaxoSmithKline for 60 million doses of a potential Covid-19 vaccine. Clinical trials are due to start in September and Sanofi has said it expects to get approval by the first half of next year.
In the wake of a surge of cases across the south and west of the US, Goldman Sachs economists downgraded their estimates for the US economy this quarter, but predicted it will be back on track by September.
The property market
Country houses valued at £5m-plus saw the strongest price growth of any property type in the UK in the three months to June, due to interest in country living and the greater ability of buyers in higher-price brackets to transact.
An increase of 1.2% was recorded in the second quarter of 2020 despite the fact property markets were closed between late March and mid-May as a result of the global pandemic, according to analysis by Chris Druce.
The same trend hasn’t been seen in London, where the picture is more nuanced, but it is perhaps only a matter of time, writes Tom Bill.
Since the end of lockdown, the number of new prospective buyers in the capital has risen 68% for £5 million-plus properties compared to the five-year average, which was the biggest jump of any price bracket.
While that is a sign of what may come, the biggest increase in deals agreed since the end of lockdown in the capital has been for sub-£1 million properties.
Over on LinkedIn I've put together this analysis on the difference between the level that offers are being made by purchasers and asking prices being sought by sellers across the capital.
The last seven days have seen the discount from asking prices to achieved prices shrink to around 2.5% - pretty much where it was before Covid.
Following the successful release of the 2020 edition of the Rural Report, a new Intelligence Talks podcast sees Blenheim Palace estates director Roy Cox and Ed Brown, bioagriecologist for H L Hutchinson, join Anna Ward and Andrew Shirley to explore how rural property owners can capitalise on their natural assets and boost their income in light of Covid's disastrous effects on tourism. Listen on Spotify, Apple, Acast.
You can find more from Andrew on rural markets, spanning commodity prices, direct support payments and the price performance of farmland, here.
If you have any questions, please contact me, or the team.