Knight Frank Daily Update Friday 15th May
UK manufacturing, student numbers and German buyers in Italy
3 minutes to read
Good morning,
Need to know
Markets painted a mixed picture on Friday morning as investors weighed conflicting economic data from China with small pockets of a resurgent virus. China's industrial production was up 3.9% from April of last year, better than most economists expected, as retail sales declined 7.5% - marginally worse than economists’ expectations.
South Korea continues to stem a small outbreak following the opening of nightclubs in the first week of May, and Italy reported an increase in new cases as it continues to ease its lockdown.
Meanwhile, Japan said yesterday it would lift the state of emergency in all but eight of its 47 jurisdictions, and France announced measures worth 18bn euros to support its tourism sector - tourism accounts for almost 8% of the country’s 2.3 trillion euro economy.
In the UK, more than a third of manufacturers are expecting that it will take more than a year to return to normal trading conditions.
The government is to begin the rapid rollout of antibody tests, starting with health workers. The test brings with it the possibility of issuing some kind of certificate based on immunity, the PM's spokesman said this week.
The property market
This morning Anna Ward brings you the first international edition of our Intelligence Talks podcast as we deconstruct our global forecasts.
Our podcast series is developing – with the Monday edition looking at all things relating to UK residential and commercial property and the Friday edition focusing on the global story.
Student property investors and developers are playing the waiting game as students delay making decisions and universities are yet to make calls on how terms will be structured during the next academic year. In a webinar this week, with 650 attendees held by Knight Frank’s Oliver Knight and Matt Bowen, UCAS revealed some 54,000 students have yet to make a decision on their university of choice, compared to 34,000 at this point last year.
As the property market begins to return to work, house builder Persimmon will today reopen its sales offices across England.
The company said yesterday that, despite the closure of its sales offices, it had secured 1,351 gross private sales reservations during the eight weeks ending the 10th of May and cancellations have remained in line with historic trends.
The outlook remains challenging for first time buyers following the withdrawal of many higher LTV mortgage products. The FT today covers forecasts from Knight Frank Finance suggesting lenders this year might issue 150,000 fewer mortgages to first time buyers than they otherwise would have done.
The number of mortgage products available has now stabilised at about 45% below pre-crisis levels and lenders are slowly reintroducing higher LTV products as physical valuations resume.
In this week's diary, Chris Druce speaks to Aelish Paterson in Haslemere and Oliver Dawson in Belgravia and Westminster. Aelish says that those sellers who had decided to come to market before the lockdown still intend to, though there is some uncertainty over pricing. Both are prepared for the resumption of activity with a mixture of video tours, sanitisers, PPE and more.
From our global team, Shi Meng Jie and Justin Eng report on the reopening of the Chinese economy, as PMI data returns to expansionary levels seen pre-COVID-19 amid concerns over a potential second wave.
In Lucca, Kate Everett-Allen finds the market is displaying resilience with enquiries from German buyers notably higher.
Finally, you can find an overview of key financial and economic metrics, compiled daily by William Matthew’s commercial research colleagues, here.
William’s report is updated daily and contains probably the most comprehensive analysis of the spread, and hopefully retreat, of Covid-19 anywhere alongside a discussion of property market implications.
If you have any questions, please contact me, or the team.