Your morning market update from Knight Frank Research - Tuesday 31 March

Economic headlines

The World Health Organisation said there are signs of stabilisation in Europe’s Covid-19 outbreak as the hardest-hit country in the region, Italy, reported the smallest number of new cases in almost two weeks.

The UK government has agreed to buy 17.5 million Covid-19 testing kits for use by mid-April. The tests would be used by key workers and could enable movement restrictions to be lifted earlier than the six months suggested by the Government’s scientific advisers, The Daily Mail reports.

China's official purchasing managers’ index rose to 52.0 this month, up from a record low of 35.7 in February and above the 50 mark which signals improving conditions.

Overnight the pound maintained the gains it has seen in recent days and stands at $1.24.

Housing market implications

In a sign of the strength of the housing market before the onset of the outbreak, the Bank of England yesterday confirmed that mortgage approvals for house purchase climbed to 73,500 in February. This is the highest monthly level recorded since January 2014, confirming the potential pool of demand once conditions improve.

Although mortgage lending will be suppressed over the coming weeks, the banks continue to show appetite to do business, notes Simon Gammon of Knight Frank Finance.

It is 25 years since the Land Registry began collecting data for residential property transactions in England and Wales. Tom Bill takes the long view in an era of unprecedented short-term volatility to see how property has fared against a range of other investments.

In the first of a series of weekly notes analysing the state of the UK retail market, Stephen Springham says Covid-19 is accelerating already ongoing structural changes, and investigates the potential scale of the occupier fall-out across high-streets.

Meanwhile in our ongoing global market investigation Kate Everett-Allen breaks down the key policy responses to the pandemic in the UAE and Saudi Arabia. Congestion levels in some of the region’s key economic centres fell substantially over the last week as governments and corporates enacted business continuity measures.

The research team will continue to update you as the current situation develops. If you have any questions, please contact me, or the team.