As of today, some shops and outdoor markets will begin reopening and friends and family will be able to meet outdoors in groups of six for socially distanced picnics and barbecues, provided they stay two metres apart, wash their hands and remain outside.

The announcement for gatherings of six came as business confidence fell to its lowest since the 2008 financial crisis in May, contrasting with other surveys which have shown a small improvement since the initial shock of the lockdown. However, employers turned less pessimistic about hiring and investing this month as measures were being relaxed. 

NHS patients are to receive doses of Remdesivir, an antiviral originally designed to fight ebola. Health Secretary Matt Hancock said the development was “probably the biggest step forward in the treatment of coronavirus since the crisis began.” The UK also began a national track and trace system.

The Bank of England chief economist Andy Haldane said last week that the latest economic data looked “a shade better” than expected, with signs that the worst has passed. Though there has been a modest recovery in business and consumer sentiment, weak confidence would continue to undermine consumer spending and, in turn, demand in the economy, he said.

The pound is heading for this year's worst monthly slide as the end-of-June deadline to extend the Brexit transition period nears. Talks between negotiators resume at the beginning of June.

However, Michel Barnier, the EU’s chief Brexit negotiator, said that Brussels remains open to extending the transition period by up to two years. David Frost, the PM's Europe advisor, told MPs yesterday he was working under instructions the transition period should not be extended beyond 31 December. 

Transactions

Demand has unsurprisingly bounced back strongly in the two weeks since the market re-opened.

The number of new prospective buyers in London was 28% higher than the five-year average in the first full week of trading since the lockdown. The number is 9% below that recorded in second week of March, indicating the market has not yet returned to full strength. However, for context, the March figure was 41% higher than the five-year average due to the post-election bounce.

Not that these London-based buyers are necessarily looking for property in the capital to the same extent that they were before the lockdown. 

Demand has been growing for outdoor space and search areas have changed over the last three months. Before the lockdown, 62% of London-based buyers were looking in the capital. Since the start of the lockdown that has dropped to below half to 45%. The main beneficiaries of this switch are the south-west and south-east, which combined have now become more popular than the capital for London-based buyers. 

Furthermore, before lockdown, 14 of the top 20 areas that London buyers targeted were in the capital but areas including Wiltshire, Bath and North East Somerset and Guildford are all in the top 10.

Prices

Less predictable is what happens next to prices. Demand has surged and supply will take a while to catch up, a fact buyers and sellers looking to act quickly should recognise.

That may change as the initial rebound loses some of its early vigour. Stark economic data will be released over the summer that shows the extent of the recession in the UK. While it may be historic by then, it will dampen sentiment at a time when the government’s furlough scheme will begin to unwind and the economic impact of the pandemic on the employment market becomes clearer.

However, the scale of pent-up demand in the property market is best measured in years rather than weeks. While the lockdown period has held demand in check to some extent, more than half a decade of price declines and political volatility will also play a significant role. There has been very little meat put on the bone in terms of house price growth over the last five years and nowhere is this truer than in prime markets.

Lettings

Demand in the lettings has also spiked since the market re-opened. The number of new applicants in the week ending 27 May was more than three times the figure recorded in the first week of lockdown and 9% higher than the five-year average.

If anything, the lettings market has proven more resilient than the sales market. When data from last week is compared to the five-year average, the number of viewings was down by 23%, which compares to a 43% decline in the sales market. Similarly, the number of properties where Knight Frank was called out for a market valuation was 20% below the five-year average for lettings and 47% below in the sales market. Finally, web views were 32% up for lettings properties compared to a 21% decline in the sales market.

Residential development

Following the easing of lockdown restrictions from mid-May, construction sites in England and Wales continue to reopen. Construction data provider Glenigan reported last week that 40% of suspended private housing projects have been reactivated, up from just 3% at the beginning of April.

The phased programme of site re-openings announced by the major housebuilders will boost this total further over the coming weeks.

The question now is likely to turn to how to solve the productivity puzzle, with even official health guidance recognising that it is not always possible for construction workers to work 2m apart.

Moves have been made by the government to address this issue, with longer working hours on-site - to 9pm - including Saturdays, and even night and Sunday working if the need arises. Housebuilder themselves will continue to prioritise sites nearer completion where headcounts tend to be lower.

Finance and mortgage markets

The number of mortgage products available to borrowers climbed 3% last week following the resumption of housing market activity.

Borrowers now have 8,450 products to choose from, up 14% from the depth of the crisis six weeks ago, according to lending technology company Mortgage Brain. ESIS volumes, a proxy for mortgage market activity, climbed 9% last week, and are up 29% since the trough.

Though conditions are improving, there is still some way to go before normality returns. Despite increases in product numbers and ESIS volumes over recent weeks, they both remain down 42% and 31% respectively on the pre-crisis peak.

We expect product numbers to continue rising as lenders clear a backlog of mortgage applications following the resumption of physical inspections. Last week, 31 lenders said they would resume in-person valuations.