Knight Frank daily update - Friday 1st May
The journey out of lockdown, land values and shooting sentiment
2 minutes to read
Good morning,
Economic headlines
Boris Johnson for the first time confirmed the UK is past the peak of infections and will next week confirm how Britain will return to work. The Prime Minister hinted that lockdown measures may vary in different parts of the country and that "face-coverings" will play a role. He also ruled out a return to austerity.
The UK’s NHS will be given priority access to a potential Covid-19 vaccine being developed by British scientists under a partnership announced yesterday.
In trading limited by holidays Japanese and Australian shares dipped overnight and the dollar climbed after Amazon and Apple warned about the impact of the virus on future earnings. Regardless, US stocks yesterday notched their biggest monthly rally since 1987, cutting the coronavirus-driven losses on the S&P 500 this year to about 10 per cent.
Germany, Portugal, Italy and France are all beginning to reopen their economies.
Property market headlines
Nationwide this morning said house prices climbed 3.7% during the year to April, the strongest rate of growth since February 2017, with a monthly rise of 0.7% for April itself. It is important to note that much of the data that underpins Nationwide's index pre-dates the lockdown, although the lender's chief economist Robert Gardner said the policies adopted to support the economy "should set the stage for a rebound once the shock passes". You can read our forecast for values and transactions here.
While UK housebuilders, including Taylor Wimpey and Persimmon, have reported robust private reservation numbers since the lockdown started, Anna Ward's analysis of land values suggests social distancing rules, delays in the delivery of construction materials, smaller workforces and a more uncertain sales environment is likely to weigh on land values over the medium term. You can read the full report here.
Our latest Prime Global Cities Index, which covers the period to the end of March this year, reveals five of the weakest performing markets were in Asia, led by Bangkok, Singapore and Hong Kong. All eyes are now on these markets to watch their pace of recovery, writes Kate Everett-Allen.
Nick Holt's report from China, published this morning, reveals Knight Frank teams across the country are seeing more activity in the real estate markets. Most notably, in the industrial sector. E-commerce-led logistics demand has been strong, with an increase in enquiries across most Tier-1 cities. Meanwhile, residential activity continued to pick up in April underpinned by developers offering discounts and the existing demand/supply imbalance in Tier-1 cities.
Finally, Andrew Shirley continues his analysis of UK rural markets with the results of the Knight Frank Shooting Sentiment Survey, in which half of respondents say they are planning to continue their shoots this year. Only 13% had scrapped their days already.
If you have any questions, please contact me, or the team.