Monday Research Daily Update

Good morning,

Over the past four months the Knight Frank Research team have shared daily insight, tracking the progress of the pandemic, and considering its impact on the economy and property markets.

As more of the world gets back to work we are shifting to a new pattern with three updates a week, every Monday, Wednesday and Friday.

Our objective remains focused on giving you a short two minute read, bringing together relevant updates in a digestible format and with links to relevant longer-form online resources.

The road to recovery

Nearly half of Britain’s biggest companies think it will take until the second half of 2021 before business recovers from the coronavirus pandemic, according to a survey by Deloitte. Another 33% predict a recovery in the first half of 2021, and 10% said their business had already bounced back. The results fall broadly between the OBR's upside and central scenarios that we covered last week, in which the country's economic output either rebounds relatively quickly, hitting its pre-virus peak by the first quarter of 2021, or recovers by the end of 2022.

The stimulus conundrum

Economic policy-makers globally are struggling to agree on the scope and timing of stimulus required to shore up the world's economic recovery. European Union efforts to agree a 750 billion-euro stimulus package remain at an impasse. Leaders are at odds over how to carve up the vast recovery fund, and what strings to attach for countries that stand to benefit. Meanwhile, policy makers in the US will resume contentious talks this week on another round of stimulus. House Democrats have already approved a $3.5 trillion bill, while the White House has said the final package shouldn’t exceed $1 trillion -- a sign of how far apart the two sides are. We talked on Friday about the growing likelihood the Bank of England will take further action to revive growth in coming months.

What’s happened to summer?

Tom Bill this morning updates our Residential Market Outlook with a comparison of this summer's property market data against the five year average. Evidence is building that there is unlikely to be a significant seasonal lull in July and August this year, with the new stamp duty holiday reinforcing this trend. New supply of homes for sale and new buyer registrations have both risen sharply in July. Rightmove this morning said asking prices climbed 3.7% from a year earlier in July, the strongest result in more than three years.

Student housing in demand

While you might be focused on your upcoming summer holiday, student property owners are thinking ahead to the new autumn term. Our latest Intelligence Talks podcast, released today, sees Sarah Barr Miller from UCAS join the Knight Frank team to discuss how Covid has meant professionally managed student accommodation has become more critical, with students looking for flexible contracts and well managed property. The teams also takes a look at student sentiment and numbers, as well as deals and investment into the sector. Listen on Apple, Acast and Spotify.

In other news...

Demand has surged in Edinburgh’s prime residential market in the fortnight since the property market reopened in Scotland, signalling a potential rise in sales volumes. Offers made were up 141% versus the five-year average in the two weeks following the re-opening on 29 June, writes Chris Druce. Post-lockdown activity levels picked up more slowly in Scotland's country house market, and house prices dipped in the second quarter. Andrew Shirley's rural update looks at the implications for landowners from new Food Standards Agency guidance. Canary Wharf Group, has pledged to reduce emissions by 65 per cent by 2030 and ensure 60 per cent of its suppliers have science-based emissions targets by 2025.

Finally, some intrigue from the editor of medical journal The Lancet.