Midweek property news update
What to expect in the property market this winter
3 minutes to read
What happens next?
There is a great deal of interest in what the final quarter of this tumultuous year holds for the property market. In a new agent's diary, Chris Druce finds some caution is emerging among buyers on concerns over Brexit and the end of the furlough scheme.
However, numbers run by Tom Bill indicate the momentum generated after the market re-opened in May is still building. The majority of sales that exchanged over the last two months were unconnected to the post-lockdown burst of activity, and with the average time between a sale instruction and exchange taking about six months, it's likely we'll continue to see strong levels of transactions throughout the rest of the year.
Meanwhile, a recovery in UK gilts suggests Lifetime Mortgage rates, the most common form of equity release, may be about to start rising.
Building the recovery
The surge in property market activity is now being felt in the construction sector, which experienced the quickest rise in new business since before lockdown during September.
Business optimism was at a seven-month high as housebuilding led growth, according to the latest Purchasing Managers' Index. Staff numbers continued to fall but the rate of workforce contraction eased to the slowest for seven months. Firms attributed job cuts with the releasing of furloughed workers after restructuring operations.
Construction looks to be the bright spot. A separate survey by the Centre for Economic and Business Research found just 35% of 500 companies described trading conditions as positive.
Big progress?
Reuters this morning carries quotes from EU diplomatic sources suggesting 'big progress' has been made in the latest round of Brexit talks. The two sides are now gearing up to negotiate until as late as mid-November - rather than cutting talks off at the start of next month.
Goldman Sachs is advising its clients to buy sterling, with analysts predicting that the UK and EU could reach a "thin" post-Brexit trade deal by early November.
Positive signs, but expect more volatility in coming weeks.
Johnson’s new Jerusalem
As the UK's infection rate continues to tick up the Prime Minister yesterday pledged to transform Britain by building more new homes, improving education and boosting the green economy.
Mr Johnson's proposal to introduce state guarantees to boost high LTV lending for first time buyers was met with scepticism by the banks, who took the opportunity to warn against reckless lending.
Meanwhile, Rishi Sunak is drawing up proposals to offer further support to companies affected by local lockdowns.
Price growth returns to PCL
Quarterly price growth returned to the prime central London property market in September for the first time since February this year, writes Tom Bill.
An average increase of 0.2% was the same figure recorded during the so-called ‘Boris bounce’ that followed the general election in December 2019, however in a year when demand has ebbed and flowed so dramatically, the recovery is still fragile.
This stronger performance has been driven by an increase in demand for family houses and more outdoor space since the lockdown.
In other news:
A fascinating look at the logistics of distributing vaccines across Asia.
Andrew Shirley's Rural Update finds agricultural land values are weathering the uncertainty of Brexit for now and, for those looking to buy, lenders are offering some very attractive long-term deals.
Finally: the ultra-rich are using giant home loans to access cheap credit; a revolution in factory-built homes; Australia's Victoria state reaches lower infection milestone; the French economy stagnates; Trump abruptly ends stimulus talks.