Knight Frank Daily Update Wednesday 6th May

Good morning,

Economic headlines

As the UK moves into the third consecutive week of declining new cases, a survey by the British Chambers of Commerce reveals most businesses could be up and running only days after restrictions are lifted.

Almost two-thirds of companies with fewer than ten employees and half of large businesses said they could be ready within a week, with nine in ten able to resume trading by the three-week mark. 

The Chancellor is expected to announce plans next week to wind down the furloughing scheme from July as part of an attempt to get people back to work as the lockdown is eased.

Airbnb said yesterday it had seen bookings in a number of European countries recovering as lockdowns are eased. By the end of April the number of bookings by Danish users planning stays in their own country stood at around 90% of April 2019 levels, while in the Netherlands domestic bookings were approaching 80% of last year’s.

Norway, Sweden, Switzerland and Austria also saw some improvements in the number of domestic bookings.

Markets were little changed overnight ahead of Thursday's Bank of England policy meeting and Friday's US jobs report for April.

Property market headlines

Two million households have utilised the mortgage holiday scheme, according to research from Capital Economics. The growth in demand is made clear as UK Finance, the banking industry body, said lenders had offered just over 1 million holidays back in early April. 

This morning we publish a guide to borrowing during the crisis by Alex Ogario, Head of the Private Office at Knight Frank Finance. Though interest rates are expected to remain low for a considerable amount of time, the level of quantitative easing being carried out around the globe has implications for future inflation. 

Over the long term we may see interest rates rise, and ten year rates currently as low as 2% may look appealing for borrowers taking the long view.

Oliver Knight's analysis of Energy Performance Certificates awarded for new homes - a leading indicator for new housing delivery - suggests that 2019/20 will mark the peak for housing delivery for some years to come.

Our forecast is that private housing delivery across the UK in 2020 will be around 35% lower than previously expected levels.

With the Prime Minister set to outline the UK’s route out of lockdown on Sunday, Chris Druce has details on how estate agents will operate if residential viewings resume later this month.

Finally, Flora Harley's analysis of Google mobility data in Dubai shows increasing visits to locations across the retail, recreation, parks and retail sectors - though all remain well below pre-pandemic levels.

If you have any questions, please contact me, or the team.