Monday property news update
New lockdowns, our 2021 property market outlook and “escape to the country” to continue?
3 minutes to read
Governments map a path to spring
The UK government has asked the country to prepare for what will in effect be a third national lockdown, including likely school closures in the worst affected areas. The prime minister is expected to make an assessment of the latest infection numbers by Wednesday, according to The Times this morning.
Governments across Europe are grappling with the same decision. Germany is preparing to extend its nationwide lockdown until the end of January and France on Saturday introduced 6pm curfews across 15 departments in an attempt to stem the spread.
Meanwhile the UK, which has already administered vaccines to more than 1 million people, will begin issuing shots of the Oxford/AstraZeneca jab today.
The UK property market outlook
While the more contagious strain of Covid-19 is exerting pressure on the UK economy, its impact on the housing market is ultimately likely to be limited in 2021, Tom Bill writes in a new UK Property Market Outlook.
Most buyers will assume that a house search started this week won’t reach completion until spring, by which time the vaccination programme will have changed the landscape. Plus, while the end of the stamp duty holiday in March will clearly have an impact on transaction numbers, the effect will be reduced if the pandemic has entered the endgame.
Much of this depends on whether the government introduces new restrictions that limit or stop the property market from functioning. As we saw last year, any temporary closure would delay rather than halt transactions, a fact that accounts for some of the current pressure on the conveyancing system. See the full piece for more.
What next for the escape to the country
The escape to the country trend prompted the price of country homes to surge by their strongest rate in six years during 2020 (see data from Chris Druce published over the festive break). The trend has been replicated across several western economies as workers have become untethered from offices.
On the outskirts of New York, the US Postal Service received 108,969 temporary change of address requests between March and July, more than six times the number received in the same period in 2019, according to novel data published in the FT.
That scale of movement opens up the possibility of pressure on local infrastructure such as schools and commuting train lines, the scope of which will define whether this is a temporary or more permanent trend - particularly when we start to see the reopening of offices, cinemas, theatres and restaurants in cities once more.
Global prime house prices climb
Knight Frank's Global Residential Cities Index, which tracks the movement in average prices across 150 cities worldwide, has provided a unique window into the pandemic's impact on housing markets amid the varying restrictions on movement that dominated 2020.
The index's annual rate of growth increased by 4.7% in the year to Q3 2020, up from 4.1% in the 12 months to Q2 2020, according to new research from Kate Everett-Allen.
Record low interest rates, huge fiscal stimulus measures as well as a release of pent up demand post-lockdown are behind the uptick in price growth, and with the prevailing travel restrictions during this period buyer demand was largely domestic in nature.
In other news...
Asian factories shake off Covid-19 hit, global shares head for new records, and finally, City of London law firms reassess office space.