Monday property news update - February 15th 2021
A SDLT holiday extension, the economic light-switch and a new front on the battle for privacy
4 minutes to read
The only holiday in town?
The chancellor is considering a six week SDLT holiday extension that would enable buyers to complete through to mid-May, according to a report in Saturday's Telegraph. It's clear the Chancellor is keen to keep any extension short in order to avoid to keep tax losses to a minimum.
However, as Tom Bill notes in a new Property Market Outlook, the holiday has played a supporting rather than a central role in driving demand since July. If the Telegraph story proves correct, the proportion of sales falling through will become an even smaller minority. For the Chancellor, a small loss of revenue may be worth bearing to avoid the negative headlines these failed sales would be capable of generating.
The current slowdown in new properties for sale - see Friday's note - suggests a certain amount of activity has been delayed until the spring, which could produce some short-term downwards pressure on prices as more sellers come to the market at the same time. However, over the course of the year we expect UK prices to be flat, underpinned by steadier and more seasonal demand after the summer and as the vaccine rollout gathers pace.
The economic light-switch
ONS data published Friday cemented 2020's 10% economic slump as the worst fall in output for 300 years. The final figure was pared back slightly by 1% growth between October and December, beating a forecast of economists polled by Reuters.
The Bank of England now expects a contraction of about 4% during Q1. In a column for the Mail, BOE chief economist and resident voice of optimism Andy Haldane says the economy is about to turn "a decisive corner", citing the pace of vaccinations, the build-up of household savings and a £100 billion war chest amassed by companies who put off investing due to Brexit and the pandemic.
Mr Haldane says the impending shift in sentiment is likely to be rapid - like "a light-switch being flicked rather than a dimmer-switch being turned".
Tracking the vaccinations
Over the weekend, the government hit its target to vaccinate the 15 million most vulnerable people. Doing so offers protection to the groups in which 88% of Covid-19 deaths have occurred.
The government now aims to vaccinate another 17 million people by the end of April — all over-50s and those with certain health conditions. That would protect groups that have suffered 99% of Covid-19 deaths, according to the Times link above.
See this morning's paper for a sketch of the government's unconfirmed plans to allow families from the same household to go on breaks from April. The piece says the PM is increasingly confident that all children will be back in school by March 8, when there will also be a reduction in outdoor restrictions, allowing people to sit on park benches with someone from another household.
Helicopters, art and yachts
An expose by French newspaper Le Monde revealing the 64,458 beneficiaries of 124,000 commercial companies registered in Luxembourg is a significant moment in the long-running battle between tax authorities and privacy advocates.
The piece, published last week and linked here, is vast in its scope. Beneficiaries span 157 nationalities and the inventory of international assets includes luxury residences, chalets, yachts, helicopters, private jets, music catalogues, works of art. As the paper suggests - “the list is endless”.
The expose is unusual because it isn’t a leak. Rather, Luxembourg is one of the first to adhere to the 2018 EU Anti-Money Laundering (AML) Directive requiring all EU Member States to set up and make public a centralised register of ultimate beneficial owners of companies. Flora Harley unpicks the significance of the move here.
In other news...
In a new Rural Market Update, Andrew Shirley visits some sixty-year myth-busting research, Chris Druce has a deep dive on property markets in East Anglia, our experts walk you through everything you need to know about the latest property market data in this webinar, and a winter snapshot of healthcare property markets.
Plus, the UK downplays the risk of the EU poaching City of London business, investors eye hotel and cruise line equities as US vaccinations pick up, Singapore home sales exceed two-year high, Japan's double-digit economic expansion, and finally, what will happen to all of Britain’s empty shops?