Midweek property news update - Wednesday 24th February 2021
Joining the 1%, pay growth surges and a 3-month extension of the SDLT holiday
4 minutes to read
Joining the 1%
Understanding what it takes to join the richest 1% reveals a lot about nations' attitudes to wealth, from tax policies to the manner in which governments use regulation to shape industry.
You need about $8 million to join the 1% in Monaco, for example, clearly illustrating the influence of tax policies at the top. Switzerland and the U.S. have the next highest entry points, requiring $5.1 million and $4.4 million, respectively. In Singapore, $2.9 million will get you over the threshold, whereas in the UK it'll take $1.8 million.
The findings form part of Knight Frank's Wealth Report 2021. This year’s report will launch on Tuesday 2 March at 9am via a global, digital event for the first time in its history, bringing the findings and insights to life like never before. Sign up here.
Three months
This morning's Times reports the SDLT holiday will be extended by three months to the end of June. The move will be announced in the Budget on March 3, bringing it into line with the easing of lockdown restrictions.
A build-up of deals ahead of the current deadline is beginning to show in places - timescales with solicitors' are slipping, for example - so the extension should relieve some pressure. The FT credits the report with pushing sterling 0.3% higher against the dollar to $1.42 - the currency is now trading at its highest level since April 2018.
Roadmap out of lockdown
After digesting the PM's roadmap out of lockdown, Tom Bill outlines what it's likely to mean for the housing market over the coming months.
Two broad themes emerge: the first is the return of seasonality. This will depend on rules surrounding summer holidays but a lull in activity over July and August should be more discernible than last year, and current demand indicators suggest the autumn market will be robust compared to recent years.
The second will be a stabilising of the balance between supply and demand. Demand is currently growing faster than supply, which in large part is due to the closure of schools. Home-schooling means it’s far easier to register as a buyer than it is to open your home to viewings. This imbalance is likely to correct next month when schools re-open.
For the practical implications for commercial property markets, see this link.
Pay and unemployment
Labour market data published by the ONS this week reveal encouraging signs of resilience.
Pay growth is now running at its highest rate since 2008. The unemployment rate slipped to 5.1%, though support schemes are significantly limiting job losses. EY, which initially expected the unemployment rate to hit 7% in Q3, now suggests it may not rise much above 6%.
Other indicators are less encouraging. Almost a million people born outside Britain may have left the country last year, amounting to the biggest net outflow of foreign-born workers on record.
Green homes
One of the biggest environmental questions facing the residential market is the extent to which consumers or regulation will drive the pace of change. Whereas green developments in office markets are being driven by a mixture of regulation, occupier demand and the shareholders of developers, it is less clear cut whether or not homeowners are willing to pay a premium for green homes on a significant scale.
Data from our sentiment survey suggests the pandemic may have moved the dial. Some 40% of respondents said the environmental impact and carbon footprint of a home was more important following the latest lockdown, with only 5% of respondents saying it was less important, writes Anna Ward.
For now at least, the government is setting the pace. New homes will be expected to achieve a 31% reduction in carbon emissions from 2021, following the government's January response to the Future Homes Standard consultation.
In other news...
Anna Ward unpicks the development pipeline in a West London hotspot and Philippa Goldstein maps out the future for hotels.
Plus: online tax set to push up costs for many of UK’s high street retailers, US Fed Chairman signals ‘hope for return to more normal conditions’, tenants may get further extension on eviction ban, plea for support after more small builders feel the pinch, retailers at the sharp end of the shutdown, HSBC to cut office space by 40%, NYC arenas open, and finally, sinking cities.