MD of a Manchester property firm warns 'recession is coming'.
Date published: 21 October 2019
With struggling manufacturers, high street doom and gloom, consumer uncertainty - and not to mention … the B word (Boris or Brexit, take your pick), the UK might be facing a difficult road ahead.
Mark Bailey, managing director of Landwood Group and Landwood Property Auctions, a leading firm of chartered surveyors, asset managers and online auctioneers, today warned that signs of a recession are on the horizon.
How is your business doing is the question on everyone’s lips at the moment? And depending on what you make, buy or sell, the answer is going to be wildly different.
In property, we are seeing the negatives - construction is struggling and banks aren’t lending as much as they were a year ago.
More worryingly, at Landwood we are also receiving more instructions over the past few months than we have done for a year or more - instructions for properties that have sadly gone into receivership.
It is harder for property owners to let business space and for domestic landlords to find tenants - there’s no doubt that a squeeze is on.
With each failed building project, banks become more nervous to lend, builders stop building… and we fall headlong into a dreaded recession. Once we do, it’s anyone’s guess how deep it is or how long it lasts.
The blame for all of this cannot be put at the door of Brexit… well, not entirely.
There is no arguing with the fact that this is a period of change - domestically and globally. People err to the negative whenever there is change on the horizon - until events transpire and the scales balance out. The big issue is uncertainty.
Property is key to all of this. Uncertainty causes negativity, while a solid market has the opposite effect.
It’s true that the value of houses makes people feel wealthier - even if they have no intention of moving and their bank balance hasn’t changed by a penny as a result.
Across the UK, there are a few exceptions to the story of gloom. In Manchester city centre, home to Landwood HQ, the skyline is full of cranes as building continues apace.
Growth hotspots, where investment is still happening, do exist. What have they got in common? A relatively young population, a well qualified workforce that is staying put because there are jobs and a good work/life balance for them.
Liverpool, Leeds and Bristol can also be added to this list - however while they may be similar in terms of positivity and buzz, their growth is more sporadic.
So, if the pointers are all correct and a recession is upon us, what’s the advice? Sit tight. Whether you are a commercial property owner or a domestic landlord, try your best to ride it out, perhaps for six months, before making any business decisions. Look at your borrowings and don’t over-stretch yourself at this time.
There are always people who benefit from downturns in the market and they tend to be cash buyers. So if you have cash to invest long-term, a ripe time to buy may be about to begin.
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