Monthly UK Economic & Real Estate Briefing – September 2020
A number of indicators point towards continued activity. This is in contrast to what is currently being experienced across Europe where a few countries have already been subjected to new restrictions.
Data for Q3 will show a continuation of the recovery, however economic activity is expected to slow sharply over the next few months. For the real estate market, it is set to be a busy Q4. Preliminary Q3 data suggests volumes remain c. 50% down on pre-pandemic levels, but investors face growing pressure to deploy capital at scale, which is fuelling demand for portfolios and prime London assets.
Key findings include:
- The Bank of England’s Monetary Policy Committee (MPC) voted unanimously to keep rates unchanged at 0.10% and the asset purchase target at GBP745bn. The market largely expects additional QE to be announced at the November meeting, just as the ECB and the Fed have done so.
- Preliminary data indicates transaction levels remain suppressed on recent years. Weight of capital is building around a few defensive subsectors, but deal flow at the smaller end of the market remains subdued.