Monday Property News Update
Revealed: what next for UK house prices
3 minutes to read
The PM's competing pressures
Brexit once again leads the papers this morning after Boris Johnson set a five week deadline to reach a new agreement with the EU. The FT reports the PM is preparing to sign legislation that would dilute last year's withdrawal agreement, and the Irish foreign minister has already expressed his disapproval.
This is one of a number of pressures on the PM. The UK yesterday recorded the highest number of Covid-19 cases since May, although fatalities remain low, and manufacturers called on the government to extend the furlough scheme amid warnings that almost a third of companies plan to cut jobs in the next six months.
The property market outlook
It's against this backdrop that we have updated our forecasts for UK house prices and transactions. Over the past four months, the property market has experienced the most abrupt change in sentiment in its history, writes Tom Bill.
While evidence of a recovery is building, valid warnings about the unknown economic impact of the pandemic remain. Based on a market analysis that includes listings data, we forecast UK property transactions will fall by 15% this year compared to 2019. August was unseasonably busy and the fourth quarter could benefit from a similar trend.
In relation to prices, the overall picture is broadly flat with slight upwards movement in areas with more outdoor space and greenery. For detailed analysis and the annual forecasts up to 2024 across prime London, prime regional and UK markets, click here.
The global picture
It is not unusual for official house price indices to be published with a two or three-month time lag but this quarter 29 of the 56 countries and territories we track have yet to report their figures for Q2 2020, no doubt as a direct result of the operational challenges presented by the pandemic.
The data we do have reveals the recent uptick has not been limited to the UK market, with Turkey leading the rankings and European countries occupying 18 of the top 20 places according to Kate Everett-Allen. The trends suggest the impact of the pandemic on global housing markets is likely to be inconsistent and irregular.
Did we eat out and did it help out?
The 84,700 hospitality venues that signed up to the Eat Out to Help Out scheme have lodged claims, covering over 100 million meals.
Stephen Springham takes a sober look at the scheme's success. The operators were clearly happy to see cash returning to the till, while also providing reassurance/proof that they were able to operate safely under enforced social-distancing compromises. Plus, footfall was up 21.1% week-on-week to Wednesday 26th Aug. However, questions remain as to whether the scheme has lured spend away from other sectors, namely grocery.
Trans-Atlantic property trends
This week we have launched the second series of the Intelligence Talks podcast. With many of us starting to commute into offices, we’ve adapted the podcast to bring you a tightly focused weekly Monday edition providing a topical discussion on what’s happening in key global property markets.
In our first episode, Douglas Larson, of Newmark Knight Frank, explains why tech giants are continuing to expand in New York; Tom Bill discusses the rationale behind our new UK house price forecasts, and Knight Frank Finance partner Hina Bhudia and Patrick Gower discuss how lenders in the UK are dealing with the rise in demand for mortgages and payment holidays.
Listen now on Spotify, Acast or Apple. Our other Intelligence Talks podcast episodes are also available on our website.
In other news...
Andrew Shirley's latest Rural Update explores the implications of a no deal Brexit on UK farms, and looks at how woodland could help many landowners diversify their income streams post Brexit.
Finally: China's exports rose at the fastest pace in more than a year, Blackstone and Advent pay for Covid-19 tests and taxis to bring staff back to work, and the service economy meltdown.