This time last year it would have seemed fanciful to suggest that after a vote to leave the EU, the UK would grow as fast as the remainder of the global economy, but we did quite well in the circumstances! However there are changes afoot as the implications of an apparently ‘harder’ exit and the longer term impacts of the decision become clearer and feed into the real economy. One of the tangible effects is the return of inflation as a result of the weakening pound, and this will almost inevitably dampen consumer and business confidence. On the other hand, currency effects continue to represent a significant opportunity for overseas investors, particularly those from mainland Europe and Asia looking for value and resilient longer term income.
All that said, we’ve learnt to ‘expect the unexpected’ following the events of 2016. I feel sure that in 2017 there will be unpredictable changes in the legal and geopolitical landscape that will impact all global markets, our economy in the UK, and property as a sector. As a consequence we all need to remain vigilant, perhaps more so than ever before.
At a property level, understanding occupier and consumer demand, the changing culture of work and the sharing economy are all absolutely essential. As a sector, property has been slow to react to the digital age, both in terms of people and technology, but I believe we will see new concepts rolled out by the more enlightened investors and developers, whether it’s an innovative hotel concept, a different residential model , a new paradigm for offices or an expanding retail ‘experience’
Something else to look out for in 2017 is the increasing influence of Millennials, as explored in CBRE’s recent ‘Millennials: Myths and Realities’ report and blog. By 2020, those born between 1980 – 2000 will make up 50% of the working population. We are already seeing this in how they like to work, play and live. As an example, many of this generation favour the UK regional cities as factors such as housing, transport, a shorter commute and an improved work/life balance emerge as priorities.
We will explore these themes during the year but in the meantime experience tells me, in these uncertain and rapidly changing times, the number of opportunities will increase significantly. I am not sure who said it, but ‘If opportunity doesn’t knock, build a door’.
Happy door hunting and please feel free to give us a call!
Brexit, Economy, European Union, Investors, Millenials,