I’m writing this in April 2020 but, in January 2018 this blog wrote:
“Some people active in the industry have forgotten 2008. After all, it is now 10 years ago, so some in the industry were not even working then. However, some older heads really should know better about the cyclical nature of the industry. How about 1981, 1989 and even before that, 1973? Each has been a crash which was unforeseen. It is very difficult to see what particular straw will bring it all crashing down.”
“There will be one identified apocryphal trigger for sure. I wonder what it will be?- Let’s hope it does not come in 2018 but, be in no doubt it will come for sure-it is just a matter of time.”
Are you wishing yet you had taken more notice of this blog? The crash came in March 2020.
Well none of us foresaw the Coronavirus and the dramatic impact it would have upon the world economy – let alone the housing market in this country. This has not been an apocryphal event but an actual dystopian event beyond imagination. However, if you had taken stock back in 2018 of your property holdings you would have done well to exit the market or re-organise your portfolio of holdings.
Where are we now? Student housing, retail, co-working offices all seem in the dumps from a property perspective. Shops in the High Street, (non-food) cafes and restaurants seem dire. Gym and leisure properties are closed. Who would want to start delivering sheltered housing development schemes now? These have proven to be very susceptible to virus transmission. There may be some winners in terms of industrial warehouse distribution for food supplies. On line retail purchases will continue to rise so that the last mile distribution depots will be more popular. Possibly out of town retail might perform more readily with the new distancing rules for public gatherings.
What about housing? This depends crucially upon the availability of finance and this is likely to dip as the economy enters such a major downturn. Some talk of a v shape return to economic prosperity but, this is beginning to look like wishful thinking or, a Donald Trump election promise. As the close-down continues and unemployment rises there will be less money around in the hands of individuals to finance major house purchases. The banks are not helping as they maintain their ridiculous interest rates in the face of them having access to free Government cash and base rate at 0.1%. Hopefully, they will be punished eventually.
What’s to be done? Obviously, there will be “bottom fishers” around to look to acquire property from those in distress. It’s a good time to be such a fisher! But, this will not be a v shape economic bounce. The downturn will last a few years at least. So, plan your property moves with an eye to the future. Perhaps 2023 or 2024 will be the years to be back close to normal. The Olympics in Paris 2024 might signal a beacon for a new happier time for all. Meantime and, as I said in 2018, please get in touch if you want any property advice across the board. We have the expertise and the contacts to help you whatever your problem may be – and maybe a little bit of a crystal ball too! Take notice this time at least!