Midweek property news update
Record economic growth, the office market revival and house sales surge
3 minutes to read
The Chancellor Rishi Sunak will today publish a slimmed down, one year spending plan, rather than his long-planned three year comprehensive spending review.
Headline policies like a £4.3 billion plan to tackle long-term unemployment are likely to be eclipsed by the OBR's economic forecasts laying out the impact of the pandemic. Government borrowing will be close to £400 billion this year as public spending jumps above 50 per cent of GDP.
However, according to this morning's Times, updated GDP forecasts will show that the economy is on track for a V-shaped recovery. After a shrinkage of about 10 per cent this year, the deepest recession in three centuries, Britain will have its fastest growth since the 1940s.
The latest on the future of the office
The ongoing rethink of global working patterns has prompted a great deal of interest in the future of the office. Faisal Durrani this morning takes a sober look at London's office market, and outlines what we can learn from the latest data.
The third quarter has emerged as the weakest quarter on record for office take-up, with just one-third of the long-term quarterly level of deals being registered. This now means that 2020 has had the two most subdued quarters for office leasing in our 30-year time-series.
However, the number of occupiers that have renegotiated their lease in the short term is suggesting that real demand is being deferred, rather than eliminated. In addition, a spate of big ticket deals at the start of October suggests many investors are bullish on the outlook for both London and its prime offices. Indeed, during the first 8 days of Q4, deals in excess of £1.2bn were registered, almost equalling the total investment turnover during Q3.
What next for the property market surge?
There were 105,630 UK residential transactions in October, 8% higher than the same period a year earlier and up 10% on September's figure, according to HMRC figures published yesterday.
The rise in sales volumes reflects the surprisingly strong rebound in sales activity after the first lockdown, and the surge in activity since the stamp duty holiday was announced. Expect even stronger sales figures over the next few months in the run up to the ending of that holiday at the end of March next year.
Meanwhile, total SDLT receipts in Q3 were 27% higher than in Q2 2020 due to the easing of the lockdown measures and down 40% compared to Q3 2019 due to the SDLT holiday. In a new agents' diary, Chris Druce reveals where the holiday has had the most impact.
A triple hitter for global markets
World shares rallied to a record peak overnight as the Dow Jones benchmark cracked 30,000 for the first time. Bloomberg hailed a "triple hitter" of positive vaccine news, better-than-expected US economic data and the market-friendly selection of Janet Yellen as US Treasury Secretary as the big factors drawing investors into equities.
Gold dropped to four month low and oil climbed past an eight month high on renewed expectations of a swift recovery in global energy demand next year.
Meanwhile, billions of dollars in market value of Asian makers of protective and medical gear has been wiped out by the prospect of effective vaccines.
In other news...
A residential cladding update, US house prices gain most on record as low rates drive demand, Knight Frank's market risk monitor, Merkel proposes tougher virus restrictions, Macron announces three-step reopening, rich Americans want second passports, expat hubs turn on those they once courted, Hong Kong cuts stamp duty, China sales help Tiffany’s profits shine, Janet Yellen prepares for second act, airlines offer passengers health passes to steer out of Covid crisis, New Zealand reimposes lending curbs over housing bubble fears, and finally, to survive the pandemic, Savile Row cuts a bespoke strategy.