Friday property news update
Positives and negatives for the housing market, the mortgage mob and a new View
3 minutes to read
Taking stock of the global picture
The number of confirmed Covid-19 cases globally surpassed 36 million this week. The spread of the virus is ebbing in Asia and Latin America and rising across Europe, North America and the Middle East.
Though cases are declining in Asia, the region still accounts for nearly a third of new cases. Meanwhile, Europe now accounts for 11% of total confirmed cases, yet the region was responsible for a fifth of all new cases in the past seven days.
Global business sentiment remains in positive territory despite rising case numbers, and the mobility of populations is still increasing but at a slower pace. Flora Harley this morning has more on the global economy distilled into just five charts.
All the latest from the property market
The RICS September survey of estate agents confirms much of what we've been covering in these notes: more new buyer enquiries, more new instructions and another net positive balance on sales, led by East Anglia the South West and Yorkshire & the Humber. Respondents report that house prices are rising in all regions, though growth is more modest in London.
The outlook makes for interesting reading. A net balance of +17% expect sales to increase over the next three months, which flips to a net balance of -34% that expect sales to rise over the next year, revealing some uncertainty over the trajectory of Brexit and the pandemic. Despite that, surveyors expect house prices to rise over the coming year.
Chris Druce has a round up of the most up-to-date UK property market data, which includes real time indicators from Knight Frank and the latest Halifax index, which in September posted the strongest rate of growth since June 2016.
The mortgage mob
The Bank of England on Wednesday published new data showing further rises in the cost of high LTV mortgages. Average two year fixed rates at 95% LTV are now higher than at any time since June 2018, while those at 90% are higher than at any time since June 2015.
That came a day after the Prime Minister hinted the government might start issuing state guarantees in an attempt to boost high LTV lending. Simon Gammon of Knight Frank Finance tells the Times that the manner in which the property market has burst back to life since the lockdown means there’s plenty of business to go around at lower LTVs, so raising rates at the other end of the market effectively stems the flow of new applications to a more manageable level.
The FT this morning speaks to the banks, who say they will resist calls from the government to resume lending at 95% LTV. Lenders quoted in the piece also confirm struggling with exceptionally high levels of new business from both borrowers at lower LTVs and those that have obtained mortgage holidays - “Mortgages are a mob right now,” according to one executive.
Friday eye candy
Knight Frank this week published its latest VIEW magazine, our flagship residential publication dedicated to showcasing the finest properties across the world.
The issue explores the long term prospects for the city after Covid, to architecture’s persistent advance in the face of economic difficulty, as well as eco-friendly supersonic travel that could take us into space.
In other news...
Interesting charts on housing in London; Germany reports ‘alarming’ rise in coronavirus cases; locking down early may help economies recover faster, says IMF; Australia records second day without Covid-19 death for first time in three months; and finally the Bank of England will be aggressive during the second wave, says governor Andrew Bailey.