LAST year was a most eventful one, of course, in politics and history etc. and no less so in the property market. It was a brutal year.
Some would say that the year started its relentless barrage of shocks with the likes of the deaths of David Bowie and Sir Terry Wogan and people of a certain age would say that it was their childhood icons passing on that signalled the dawn of a brave new world and the passing of all that was familiar preceding 2016.
We had the global financial crisis prior and many would say that it certainly had a huge rival with the Brexit vote. Any hope of the year resuming a semblance of normality was shattered by the EU Referendum.
I am sure, if you are like me, that we are getting sick and tired of the name Brexit but sadly this is going to go on for some years to come, hard or soft landing for the EU exit. Obviously, we have got probably two years at least after Article 50 is triggered in March (constitutional questions pending) but the positives are that one assumes it will be relatively life as normal until the financial negotiations and timescales are worked out. In any event, there are a lot of positives to say that Britain, post-EU, could be a better place by having easier and direct trading links with some of our old partners and commonwealth countries in addition to already positive vibes from the world’s leading economy and also China (who is likely to take over as the world’s most dominant economic force).
A leading UK property man has compared Brexit to driving down the motorway at 80 miles an hour in thick fog with little political prospect of this fog lifting. Theresa May’s recent clarification on how Brexit will work has hopefully lifted a little bit of fog. If we try to look rationally and objectively, the nation’s biggest housebuilders’ shares crashed on the Brexit vote but have since recovered to a large degree.
From a property perspective there were stark warnings of an occupier exodus from Britain but that threat has yet to materialise.
Commercial property values nationally have corrected but only by about four per cent and I believe that the property industry is generally positive. Perhaps in the major markets specifically but significant investment and letting deals have continued, i.e. Apple taking Battersea Power Station, which has been available for years. (Whilst talking of London, there has been a sharp downturn in the capital’s residential market, particularly at the top end but in reality it was overblown anyhow and a correction was overdue.)
I believe the wiser investment gurus will continue to see the UK as a safe haven for their money, partly because we are a very stable country, politically, economically and culturally. Furthermore, we are a cheap one in the light of sterling’s fall in value and still low bank base rates and relatively low inflationary pressures (the latter two which I am sure will change upwards, but also modestly in 2017).
So what of 2017?
Well my thoughts are is that we should be less shockable this year although we will have to live with volatility. It may well be that “flat’ will be the new growth as well.
In respect of Northamptonshire, we will hopefully see a boost for construction and housing with the much anticipated Government housing white paper along with infrastructure (copying the US?) which will appeal to Northamptonshire’s strong construction identity. Opportunities for modular type construction i.e. prefab type new technology should also help by cutting delivery times for housing and industrial.
As previously mentioned, the UK’s safe reputation may be enhanced with insecurity in Europe with the French, Dutch, German and possibly Italian elections.
Perhaps the most important point for property is the role of the occupier and while many requirements are being scaled back, tech giants’ enthusiasm for the UK is undimmed. On a much smaller level we are seeing much more occupier demand locally which is not satisfied with the existing stock. The old question remains that more speculative and pre-let development is required which in turn will only happen with freed up fully serviced sites for development of varying sizes to start the chain rolling out. That probably is a leading requirement for Northamptonshire and its continued prosperity.
Build it and they will come/stay!
John Barnes can be contacted on 01536 330100 or john@gorellbarnes.com for further information on property opportunities in North Northamptonshire.
