The outbreak of the COVID-19, declared by the World Health Organisation as a “Global Pandemic” on the 11th March 2020, has significantly impacted global economies. International travel restrictions as well as restrictions on individuals’ behaviour and activity have been implemented by most countries across the world.
Market activity was impacted in many sectors, with some sectors, such as leisure, unable to function at all, and others, to include office-based service industries, hampered to a lesser degree with the ability for staff to work from home. As countries slowly start to come out of their lockdowns, more evidence will become available as to how markets, businesses and individuals respond. The world will also await further evidence on the pandemic, and whether countries will have to re-impose restrictions in some form.
Global markets have fallen since the outbreak of COVID-19. The FTSE 100 fell by a significant 25% over Q1 2020, with almost all losses felt after mid-February, effectively reversing the gains achieved over the course of 2019. At the end of Q1 2020, the index was at its lowest level since Q1 2016. Over April 2020, the index recovered slightly by 4%. Over Q2 2020, the index grew at a steady rate by 10%, recovering over a third of the losses felt over Q1. The end of Q2 figure is still 17% down on the value at the start of the year and 16% down YoY, but much improved since last quarter. Globally, economic uncertainty remains a significant factor.
Stepping back from the current global crisis, The Withdrawal Bill was successfully passed on 24th January 2020, following which the United Kingdom formally exited the European Union on 31st January 2020. The country has now entered an 11-month period, known as the ‘Transition’, which keeps the UK bound to the EU’s rules, until such time as a free trade agreement has been established. Trade talks started remotely with the US at the beginning of May.
On the 11th March 2020, the UK Government announced their new Budget. For residential property the main headline was an additional 2% Stamp Duty Land Tax (SDLT) for non-UK residents from April 2021.