Uncertainty breeds opportunity in the wake of the Brexit vote
There is no denying that the UK’s vote to leave the EU has destabilised real estate markets across the country. The Midlands is no exception.
But what uncertainty brings in one hand, opportunity presents in the other. Now is the time for business and civic leaders across the region to take positive action to capitalise on current market conditions to ensure the Midlands remains a winning location.
The Referendum result has triggered a slowdown in activity across the Midlands. Investment decisions are being postponed. Market values are inevitably responding. Whether you are an individual buying a house or a business looking to move to a new corporate HQ, the impact of the Referendum has created waves throughout the nation. The sharp end is in London where a surge of post-recession development created over-supply. London’s challenge is compounded by fears about Brexit’s impact on jobs in financial services in London – in a market where the high end residential segment was already stunned by the previous Chancellor’s SDLT grab in the Spring.
Of course, this slowdown is not just about cold feet. It’s also about savvy heads holding off for now, spying opportunity, reckoning that they can buy more cheaply – whether it’s land, buildings or construction services – in a few weeks or months’ time as prices adjust to slowdown. For those buyers already signed up to legal agreements, it will be tempting to scour the small print to find wriggle-room. Some will see opportunity in talking the market down. For bargain hunters, particularly those with $US in their war chest, now is a time of opportunity. The fall in the value of £-Sterling has already discounted prices. Falls in market value add up to a double-discount. In London, high end residential developers are seeking investors to take entire apartment blocks off their hands at heavy discounts – they just want to cash up even if it means taking a hit.
The Midlands though can be a better bet for investors if they look beyond a quick killing. No over-supply, prices and markets more stable, less exposure to the fear gripping parts of the London market, cost-effective business centres, a skilled and resilient workforce. Entry costs are lower too, even before you price in the fall in the £-Sterling.
What is more, there is a steadily compelling Midlands growth story – a great region re-finding itself after decades of over-centralisation in the UK. In the West Midlands, huge investments by Deutsche Bank and HSBC underline confidence. Infrastructure investment like the expansion to Birmingham Airport, the transformation of New Street Station and Grand Central, the reinvention of the Mailbox, the planned arrival of HS2 and the Metro extension, Friargate in Coventry. In the East Midlands, the Nottingham tram and plans to extend Fosse Park in Leicester; not to mention the burgeoning universities across the region. There’s a lot to like.
It is now the time for our civic and business leaders to ramp up a confident and coherent Midlands message to the world. But can someone please conjure a better brand than the clunky “Midlands Engine”? “UK Central”, now who thought of that….?