Your Friday property news update
Biden's property plans, a lockdown in prime central London and the clamour for residential investments
3 minutes to read
The US election and what it means
As Europe wakes this morning, Joe Biden is in touching distance of winning the US election.
Global markets have remained resilient despite the delayed result. The S&P 500 climbed 4% between 2nd and 4th November, the most during any election period since the index’s inception, writes Flora Harley.
Kate Everett-Allen takes stock of what the election will mean for the US housing market. A Biden win would likely see some form of national lockdown, higher income and capital gains taxes for high earners, tax credits for first time buyers and green building incentives for the construction industry.
UK borrowing costs fluctuate
The Bank of England's Monetary Policy Committee yesterday opted to hold the base rate at 0.1% amid pressures on jobs, incomes and spending.
Despite a record low base rate, there is currently significant variety in borrowing costs in the mortgage market, depending on a given bank's volume of work and appetite to lend, according to Simon Gammon of Knight Frank Finance.
Knight Frank’s UK residential business set an all-time record for offers accepted in October. The resulting pressure on the conveyancing system caused by such elevated levels of activity could well be eased in the coming weeks by the government's decision to keep the market open during the lockdown, writes Chris Druce.
A second lockdown in prime central London
A second national lockdown in England is unlikely to impact the prime London property market as the first one did, writes Tom Bill.
Momentum generated since the market re-opened in May will drive deal activity into Q1 next year. October was the third highest month in five years for exchanges in London, after March 2016 before the stamp duty hike and December 2019, the month of the decisive UK general election result.
Meanwhile, high levels of supply continue to put downwards pressure on prime central London rental values.
The growth of residential investments
We've talked in recent weeks about the resilience of purpose-built rental properties. The student accommodation, PRS and senior living sectors are to some extent shielded from prevailing economic headwinds by long-term demographic drivers, whether that be our ageing population or demand from the young to live affordably in central urban locations.
Today, we publish the results of our survey of 40 of the largest investors in those sectors, who between them already have a combined £62 billion committed.
Combined, our respondents said they expect to have invested an additional £10 billion in 2021 and have earmarked £42 billion over the coming five years, writes Oliver Knight. That represents a remarkable 68% increase on current capital committed.
Tracking the Chinese recovery
China’s foreign trade is expected to have continued its strong growth in October. Exports are expected to have risen 9.3% from a year earlier, according to a Reuters poll of economists.
Chinese President Xi Jinping this week addressed the party’s top decision makers at a closed-door meeting in which they laid out plans for the economy over the long term. The party will target expansion at an average pace of less than 5% a year over the next five years, well below the historical trend over the past 30 years.
In other news...
Edinburgh house prices hit new highs, green investment is having a moment, the AstraZeneca-Oxford vaccine is on track for the year end, the smallest employment gains in five months expected in the US, Ferrari and Bentley find buyers in Singapore despite the pandemic, US colleges woo lucrative students with China-based campuses, productivity comes at a price for home workers, the Fed holds rates steady, surge in European house prices stokes concerns over market resilience, the pandemic adds to woes of India’s property developers, UK construction propped up by housing boom, and finally, inside Operation Warp Speed’s $18 billion sprint for a vaccine.