Monday property news update
What next for UK house prices, the vaccine roll-out and China's recovery
3 minutes to read
What next for house prices?
UK house prices rose by 6% during 2020, though the rate of growth appears to be slowing, the Halifax said on Friday. To understand how this year is likely to shape up, we have updated our forecasts for the year ahead.
In light of the third national lockdown and the potential trajectory of the vaccine rollout, we expect UK prices to be flat over the course of this year, down from our earlier forecast of 1%. We have also removed a percentage point from our forecasts for prime central and prime outer London - now at 3% and 4% respectively.
In Greater London, we expect prices to be broadly flat this year, with an expected 1% growth reflecting the greater resilience of the economy in the capital as support measures are unwound. Beyond this year, we expect the wider UK market to outperform due to affordability constraints in London as demand is pushed further into the regions.
What next for Covid-19 in the UK?
Forecasting the future is particularly challenging when there is little certainty as to the length of the prevailing restrictions, the speed of the vaccine roll out, and any future economic stimulus. There have, however, been some interesting insights to these published in the past 48 hours that are worth sharing.
The 23 March, the anniversary of the start of the first lockdown, is the date being circulated in Whitehall as the moment coronavirus restrictions might realistically begin to be eased, according to yesterday's Sunday Times. The paper also carried an interview with Neil Ferguson, the influential disease modeller, who said in his optimistic scenario the nation is "basically back to normal" during the autumn.
Indeed, during interviews yesterday the health secretary Matt Hancock pledged that every adult would be offered a vaccine by autumn. The top four priority groups, the over-80s, care-home residents, frontline health and care workers and those deemed clinically extremely vulnerable, will be given jabs by 15 February. The government is to set out its full vaccine delivery plan later today.
What matters to investors
US employment fell by 140,000 in December as virus cases surged, with leisure and hospitality businesses hit particularly hard. That took place against a backdrop of political turmoil following last week's Capitol riot.
Despite all that, the price of US shares hit new records Friday, as investors hold their attention on the prospect of a huge new stimulus package to be proposed by Joe Biden this week. Though the amount remains undecided, it will be "in the trillions", and will come alongside action to raise the minimum wage and a new vaccination strategy, breaking away from the current strategy of holding back some shots for second doses.
Is China's recovery reaching a plateau?
China's consumer prices returned to growth in December, after dipping briefly the previous month. That follows dips in both manufacturing and non-manufacturing CPIs that may suggest economic growth that has led the world out of the crisis may be beginning a plateau.
Meanwhile, the Chinese government recorded more than 100 new cases for the first time since July, amid an outbreak in Hebei. A reminder that January 23rd will mark one year since the government imposed a lockdown in Wuhan aimed at containing the novel coronavirus Covid-19.
In other news...
In a new Rural Market Update, Andrew Shirley delves into commodity prices, the potential agri-tech benefits of Brexit and movements in farmland values.
Plus, what next for Canary Wharf, party city Dubai becomes escape hatch as Europe locks down, the fading allure of urban life leaves a dent on US mortgage bonds, and finally, Sunak looks to delay tax rises.