Midweek property news - Wednesday 17th February 2021
Bumper mortgages are back, the shift to greener homes and the resilience of European jobs
3 minutes to read
Roadmap out of lockdown
While we'll have to wait until Monday to read the government's much anticipated 'roadmap out of lockdown', coverage in today's papers offer a fairly comprehensive picture of how it's likely to look.
Much is likely to hinge on the use of rapid lateral flow tests. The Times reports 400,000 of these tests - a simple swab of nose or throat that dropped into a tube that returns results within an hour - are to be posted to homes and workplaces everyday. Schoolchildren will be offered tests twice a week once they go back, as will their parents and support bubbles.
That is what's likely to underpin the current schedule of schools returning on March 8, shops and universities in late April, and hospitality and leisure from May. All this is being noted in financial markets: sterling yesterday hit a two-and-a-half year high against the dollar and a nine-month high against the euro.
The two horse race
Every year, advisory firm Duff & Phelps surveys 250 senior bosses across banking, hedge funds, asset management and private equity to establish a hierarchy of the globe's financial centres. We'll publish our own ranking from the perspective of the world's High-Net-Worth community in the 2021 Wealth Report shortly.
New York, which has topped the Duff & Phelps table since 2019, grew its lead over London slightly this year, with 60% of respondents selecting it as the world's top financial centre, followed by London at 31% - down from 34% a year earlier. Those are fairly small moves in numbers, but the rest of the survey makes for interesting reading in light of symbolic moves in share trading to the EU mainland in recent weeks.
Illustrating the scale of the lead held by London and New York, Hong Kong and Singapore were cited as the top hub by just 2.2% of those surveyed, while the number citing Paris or Frankfurt was "negligible".
The resilience of European jobs
The eurozone economy outperformed expectations during the final quarter of 2020, with employment improving despite lockdowns in several locations, according to data published yesterday.
The euro area economy contracted just 0.6%, while employment climbed 0.3%. Growth in Germany and Spain led gains, growing by 0.1% and 0.4% respectively. The economic picture is shifting so quickly even Q4 data feels dated, however the numbers reveal important cues as to lingering economic scarring that will impact the trajectory of the recovery over the coming months.
As Jessica Hinds of Capital Economics notes, the hit to the labour market last year was nowhere near as bad as might have been expected.
Bumper mortgages are back
We talked on Friday about improving conditions in the UK mortgage market. Product choice climbed to an 11-month high and banks are once again accepting bonuses and commission to underpin borrowing in a significant boost to those working in financial services.
The Telegraph moves that on, reporting that Natwest, Lloyds and HSBC will once more offer mortgages at five times a borrowers salary. Santander and Barclays will go to 5.5x.
The shift to greener homes
The UK’s first homes to be fitted with boilers and hobs that run on hydrogen rather than fossil fuel gas will be built in Gateshead by April.
It's a small development in a much larger shift underway, as the government weighs shifting taxes away from power to gas bills in an effort to encourage the use of alternative sources of fuel to heat homes and charge cars. We are likely to hear more in the budget next month.
Utilities providers are lining up to support the changes
In other news...
Brookfield charts a path back to the office, why global investors are hungry for PCL assets right now, ESG demand prompts more than 250 European funds to change tack and finally, remote work and the San Francisco Salesforce Tower.