Your Friday Update
From London to Lake Como: tracking the housing market recovery
2 minutes to read
Rates will stay low for longer
The Bank of England yesterday opted to hold interest rates at 0.1% as it said the economy likely won't return to its pre-pandemic size until the end of 2021, slightly later than its previous estimate. However, it issued brighter short-term projections. It now expects unemployment to peak at 7.5% this year, rather than the 10% it was projecting in May, and an annual economic contraction of 9.5%, rather than the 14% plunge in its May scenario. The pound hit a 5-month high against the dollar.
The global economic picture
This follows several pieces of brighter economic data published in recent days, spanning British services and manufacturing, Eurozone retail sales and Chinese exports. Weekly applications for US unemployment benefits also fell unexpectedly to the lowest since March. Global employment data will be key in coming weeks as support across many nations winds down. Flora Harley takes a closer look at global job retention schemes, and what's likely to happen next.
Tear it up and start again
The UK government yesterday announced major reforms to the planning process that effectively amounts to tearing up the current system and starting again, according to Knight Frank's planning team. You can read the team's analysis here. Officials also confirmed price caps and discount levels for First Homes, which could stretch to 40% or 50% for more costly regions, and published some eye opening figures on the size and scope of UK developer contributions.
UK housing market update
Chris Druce takes stock of what the latest data can tell us about the trajectory of the UK housing market, as prices and transaction numbers rise from April’s low point. The cumulative number of offers accepted since the start of the year is now above the five-year average, though exchanges are taking longer due to staffing shortages at lenders and conveyancing solicitors as well as tighter lending conditions.
Tom Bill has more on prime London, where rental value declines have narrowed in recent months, but weaker demand means there will be no spike in activity this summer. In the prime London sales market, areas including Wandsworth, Richmond, Dulwich and Islington recorded monthly increases in July as they benefited from a surge in demand from families seeking more outdoor space.
Tracking the Italian prime property recovery
Italy’s prime property market is recovering from one of the strictest lockdowns globally, writes Kate Everett-Allen. Since property viewings were permitted in Italy on 18 May, enquiries from Dutch, British and German buyers have accelerated. Demand is strongest within the €1.5 million to €2.5 million price bracket in most prime markets, as well as the market over €10 million. Lakeside properties on Lake Como have been one of the star performers, with prices increasing by 5% since May.
In other news...
The return of British shoppers; construction activity increases the most in five years, though brick sales remain down 20%; US household debt has declined for the first time since 2014.