Knight Frank Daily Update Friday 22nd May
Green shoots, the race for a vaccine and an ex-Housing Minister talks stamp duty
2 minutes to read
Good morning,
Need to know
Economic surveys from Britain, the Eurozone and the US yesterday showed early signs that the worst of the economic impact of the pandemic has passed.
IHS Markit’s composite purchasing managers’ index, which measures changes in output, new orders and employment in the services and manufacturing sectors, continued to show output falling, but at a slower rate than the record lows posted last month.
The index climbed to 28.9 in Britain, from 13.8 in April. Data for the eurozone rose to 30.5 from 13.6, and in the US it climbed to 36.4 from 27.4.
A Reuters poll of 70 economists suggested the British economy will contract 17.5% this quarter, a much sharper contraction than the 13.1% predicted last month, but the recovery will be stronger than previously thought, with growth of 11.9% next quarter, assuming at least some lockdown measures are lifted.
That would result in a contraction of 7.7% this year, according to the poll, followed by growth of 5.2% in 2021.
AstraZeneca said it has the capacity to manufacture one billion doses of the University of Oxford's potential Covid-19 vaccine and plans to begin supplying it in September.
The vaccine, to which the US yesterday pledged $1.2 billion in funding, is in early stage clinical trials with the results expected shortly.
Meanwhile, London has recorded no new cases of coronavirus for a full 24 hour period, according to Public Health England.
The property market
Tom Bill has been speaking to former Housing Minister Mark Prisk about the economic issues set to dominate this parliament, and whether Chancellor Rishi Sunak is likely to address stamp duty reform.
Mr Prisk explains the balancing act the Chancellor faces, but says there is one aspect of stamp duty he should change.
Demand for UK property is rising among overseas buyers as the pound comes under renewed pressure.
Sterling was trading at $1.22 on Thursday morning, down from $1.26 at the end of April, due to the re-emergence of risks surrounding a no-deal Brexit and speculation that interest rates could turn negative to curb the economic impact of the pandemic.
Research from Tom and Oliver Knight indicates US dollar buyers have seen their buying power grow by 42% since early 2014, taking into account movements in the pound and property values.
Kate Everett-Allen takes a closer look at the UK/France border crossing, and what current regulations mean for second home purchasers. The piece includes updates on markets from Paris to Provence.
Nick Holt provides an update from China, where retails sales have climbed by almost a third in a month and most of the 70 cities tracked by the National Bureau of Statistics recorded modest residential price increases in April.
Finally, Chris Druce reports on the reopening of the Scottish property market, which is slated for June 18th. Sector specific information is expected to be released by the Scottish Government over the next week.
If you have any questions, please contact me, or the team.