Knight Frank Daily Update Thursday 11th June
Green shoots, easing the lockdown and the growth in demand for gardens and balconies
3 minutes to read
Good morning,
Need to know
Green shoots have begun to appear in the UK economy now that the worst of lockdown has passed, the Bank of England governor said yesterday. His comments follow data releases spanning consumer spending, retail sales, business trading and sentiment among company directors that all improved in May compared with April.
The OECD issued a more stark outlook for the global economy, suggesting the V-shaped recovery expected by many would "stop halfway". The organisation said it expects the global economy to end 2021 as much as 4 per cent smaller than it is today and 10 per cent below pre-crisis projections, as it urged governments to continue to stimulate economies while keeping rates low.
The US looks set to follow that path after Federal Reserve Chairman Jerome Powell indicated yesterday that the central bank will keep pumping stimulus into the US economy until its jobs market heals. The weekly employment report, that surprised economists last week when it stated employers had added a record 2.5 million workers, is likely to show further improvements when it is published later today.
Adults in England who live alone, as well as single parents, will be allowed to meet another household indoors from this weekend, and will not need to keep 2 metres apart.
The property market
This morning we update our outlook for key global residential markets. Sales data for May has already been published in Vancouver, Toronto and Hong Kong and all three saw a pick-up in activity, according to Kate Everett-Allen.
The RICS Residential Market Survey of estate agents across the UK points to an improvement in the outlook for sales over the next twelve months.
In recent days we've covered the increase in demand properties in the country, or close to green space, in the wake of the outbreak.
Similar findings emerged in the RICS survey, with 81% of respondents feeling there will be an increase in desire for properties with gardens or balconies, 74% believe there will be a shift in demand towards homes located near green spaces, while 68% are of the opinion that properties with greater private and less communal space will become more desirable.
Knight Frank Finance analysis of new FCA mortgage lending data suggests high LTV lending is returning - albeit a little slower than hoped - and the popularity of Later Life Finance continues to surge. More broadly, it is clear lenders are still eager to support demand for borrowing.
Meanwhile, in the latest agent's diary, Chris Druce covers everything from virtual valuations to looking after clients in the closed countryside.
The government is considering whether to extend planning permissions that are due to expire in the next six months, according to an exchange earlier this week in the House of Lords - you can read the transcript here. An extension of time to implement existing and pending planning permissions was one of the five measures put forward by Knight Frank to bolster housing market activity and spur economic growth in April.
At 9:30am this morning Will Matthews will host Darren Mansfield and Charles Binks for an update on the logistics landscape in the latest Commercial Conversations weekly insights webinar. Register here.
If you're reading this daily note and are not yet signed up to receive it, you can do so here.
If you have any questions, please contact me, or the team.