Friday property news update
Pent-up supply, the chancellor's choices and the scale of Asia's e-commerce boom
4 minutes to read
Signs of a turn
The government is carefully managing expectations as to when the current lockdown might be eased, with the PM yesterday stating it was still too early to offer guidance. Indeed, the government's Covid-19 data shows fatalities climbed 14% in the most recent seven days and the R-number sitting somewhere between 1.2 and 1.3.
However, there are now clear signs a turn is underway. The number of people testing positive for the virus is down 24% in the most recent seven days and the number of patients being admitted to hospital has started to dip slightly.
Vaccinations, after slowing momentarily, are surging once again and surpassed more than 2 million in the past seven days alone. That pushed the pound to $1.37 against the dollar, a two-and-a-half-year high. Flora Harley puts the vaccine roll-out into global context here.
The chancellor's choices
UK consumer spending fell sharply in early January, registering a bigger fall than November's lockdown, according to a new Bank of England dataset on credit and debit card spending. Consumer confidence also slipped back, following the biggest jump in eight years in December.
With less than six weeks to go until the budget, the Chancellor faces a delicate balancing act between issuing enough support to usher the economy through the final phase of the pandemic and restoring order to the public finances. The FT has a run down of what's being considered, including a multibillion-pound increase in corporation tax.
Meanwhile, Bank of England Governor Andrew Bailey said he now expects a pronounced recovery amid the speedy roll out of vaccines. That follows those bullish comments from BOE chief economist Andy Haldane that we discussed on Wednesday.
Pent-up supply
UK housing transactions hit 129,400 in December, 31.5% higher than December 2019, and 13.1% higher than November 2020. That puts total transactions for the year down just 11%, compared to a 43% decline in 2008 during the onset of the global financial crisis, writes Tom BIll.
Data from the first two weeks of this year show that, while the number of new prospective buyers remains above the five-year average, market appraisals for prospective sellers are falling, according to new analysis. The level of stock for sale in the market has declined noticeably since the autumn and vendors considering a sale are finding they are in a strong position.
Presumptions in planning
Some 55 local planning authorities (LPAs) delivered less than 75% of their housing requirement in the three years to March 2020 and now face a presumption in favour of development, writes Oliver Knight. The policy effectively means these areas face having less sway over planning decisions.
Roland Brass of Knight Frank's planning team notes that 40 of those 55 authorities have a Local Plan that is more than five years old and the majority sit in areas in which demand is significant, including the South East, East and London, in particular Essex, Hertfordshire, Kent and Surrey.
Meanwhile, in what may be a sign of things to come, Galliard Homes has decided to extend the stamp duty holiday by six months by footing the bill itself.
The e-commerce boom
The pandemic has fuelled a global surge in e-commerce that has ramifications for several real estate sectors, particularly the industrial sector. As restrictions are eased, attention naturally turns to whether the shifts we've seen during lockdown become permanent.
New analysis from Knight Frank lays out the scale of the shift to e-commerce across the Asia Pacific region and suggests much of the switch to buying online is likely to be permanent. E-commerce across the Asia-Pacific region surged 14% in 2020, with purchases in Japan and South Korea climbing a fifth and even laggards such as Vietnam seeing a rise of 8%.
To illustrate the scale of the opportunity, Alibaba's annual Single's Day promotion on the Chinese Mainland generated $74 billion in sales in a single day, making the combined total of US Black Friday and Cyber Monday sales of $18.4 billion look decidedly modest.
In other news...
Meet some of the firms that have committed to new London HQs, China cracks down on fake divorces that let people buy more properties, Singapore home prices rise amid property curbs speculation, and finally, how the Brexit deal was done - and what happens next.