Brexit: just another bump in the road

 

Whatever happens with Brexit, in the UK we are already in a tricky period.


Brexit bump in road.jpg

We must remember that good things come out of hard times.

Whatever the shape of Brexit, let’s hope it comes around quickly. And if we can’t beat them, maybe we just join them.

The UK economy is already suffering, and growing slower than any other Eurozone economy.

In the property market we feel that as keenly as anyone.

Either soft Brexit happens and life returns to relative normality (we were never really a member anyway!), or hard Brexit means we have to go through the pain barrier, anaesthetising ourselves by drinking Boris’s ‘romantic Brexit’ kool-aid.

Either way let’s get on with it!

Anything is better than the current socio-economic outlook in the UK just now. Hesitancy and uncertainty breed confusion and stagnation.

We are in a fearful stasis and above all else it is boring.


Some backstory:

In 2005 I (totally unintentionally!) designed Homes One perfectly with the new lean, client-focused future hoving into view. The dawn of the remote-working era was just beginning to illuminate the economic hangover from the dotcom crash in 2003, and I set off to transform the prime residential property industry armed with a cellphone, a laptop and a swagger.

As well know the period to 2007 was a golden age for London property and Homes One prospered.

Then came the sub-prime crash, leading to the recession.

Yet even this almighty thunderstorm didn’t stop us.

Post-Lehman Brothers we learned that in the new hi-tech world of financial wizardry, paradoxically the greater the volatility in other markets (and my goodness were they volatile), the better off many people were... and the busier the prime residential London property market was. The London market became an asset class in its own right.

Very luckily a lot these people were our clients, and we got busier and busier guiding them through unfamiliar territory towards best-in-class properties. On the back of such deals we successfully navigated one of the stormiest times anyone can remember.


Recent history:

Deals flowed. London flourished. The market spiked over and again.

The economic recovery began in earnest in 2012 and for the next three years we continued to grow with the London property market, transacting regularly and becoming the go-to search option for clients who want best-in-class property and need help in navigating the unfamiliar and complex territory of the London market.

Stamp duty hikes and changes to the tax regime punished the market again and again… and then Brexit!

It’s autumn 2015 and David Cameron is sitting in no.10 wondering about his legacy. He has successfully led the country out of the great depression and the economy is robust and blooming. A glint in his neo-liberal centrally-focussed vision says ‘let’s give the people what they want – a European referendum. We’ll soon know once and for all that the UK is a part of the EU. We’ll finally be full and gracious EU members!’

Unfortunately for Dave his legacy plans did not accommodate a traditional divide and conquer battle plan by the ruling elite, and cloak-and-dagger advocacy for those plans at the highest levels in his own cabinet. The leave campaign was a PR masterstroke that pulled no punches. The remain camp had no riposte.

We all know what happened next.

Dave resigned, his legacy in tatters.


Just another bump in the road:

In property, several respected commentators have already called the bottom of the market. Some prime residential prices are down 20% on two years ago. Luckily we have over ten years of blood, sweat, tears behind us, and the resulting brand equity among a very significant client base.

Around 50% of our business you see, always comes from an investment-minded perspective. People buy to let, they buy second homes and they buy to develop. When the economy slows, this stuff disappears like that mirage I mentioned, on a particularly thirsty day.

And we are left with the other half.

The half who will always be here.

They are the ordinary people (ordinary in a prime-resi kind of way) who actually need somewhere to live. And they've become the most important person in London property.

We call them the end user. For them this is the market to invest in for the long term.

People buy homes in the capital for many reasons. To work here. To provide a home for family members. To house long-term students. Or to ensure they have somewhere ready for them whenever they come to town. Often they need safe haven from countries that are unstable.

The safe haven is one of the many reasons I am confident in the London market. Our laws and institutions are respected throughout the world and people feel secure in their purchase being robust. We aim to help them with feeling secure in the knowledge they are getting the best and most sincere advice.

Having over ten years proven track record thankfully helps to ensure that happens.

We have survived the great depression, and we will survive Brexit.

It’s just another bump in the road.

Whatever the size and shape of the bump, let’s do it soon!

 
Karim Bazzi