Brexit: I wasn’t expecting that… July 2016

The news we woke up to on June 24th was not what most expected. It means that the summer of 2016 will be the subject of history books and analysis for years to come.
Whatever the outcome, whatever our personal views and business reasons for voting one way or another, a seismic shift has already occurred. Within days we had a new prime minister, a new chancellor and – for better or worse – we are facing a future outside the EU.
And life still goes on!
Inevitably there was caution leading up to the referendum. And it’s not surprising that we’re feeling a bit shaken by the outcome. Markets don’t like significant and unexpected change and immediate reaction was uncertainty and the borrowing atmosphere was distinctly chilly.
But it’s thawing now.
This week’s figures from the Office for National Statistics suggest a growth in the UK economy of 0.6 percent in the three months running up to the end of June – higher growth than expected, even by the Bank of England.
Of course, the figures relate to the period leading up to the referendum and it would be foolish to suggest that we can predict the future on that basis alone.
Some commercial property agents saw deals being shelved or cancelled as a result of Brexit. We saw only one such example. There are reports of property being dumped in London, but the market is very different there.
For us, since the early part of July business has been brisk. We’ve seen Amazon take on a huge logistics/warehouse site in Norwich, a variety of business units have been let locally and the sale of land at Orwell Crossing has gone through. We’re seeing very real interest in the Harris Business Park in Ipswich and the Whisstocks development in Woodbridge.
But to return to the national picture… the new Chancellor, Phillip Hammond, believes that the UK is in a strong position for the future, although admitted to the BBC’s economics editor, Kamal Ahmed, that it was “far too early to say how the economy is responding”. It’s a sentiment that was echoed by the British Chambers of Commerce. Common sense suggests they’re absolutely right.
We should remember two things though:
Firstly that the news as yet presents a mixed picture – by no means the doom and gloom forecast by Mr Osborne et al. While the pound has fallen in value, there are signs it is recovering. As are share prices. Lloyds Bank is today blaming bank closures on Brexit, which may be a convenient excuse! Alongside that has comes news – just days ago – of GlaxoSmithKline’s £275 million investment in the UK, despite its pre-referendum warnings that it might not happen.
Secondly we mustn’t make the mistake of talking ourselves into recession. Currently confidence is strong. And we mustn’t let ourselves be frightened or fail to take advantage of the very real opportunities out there. A weaker pound brings its benefits, and many more international markets are open to us.
It may be that people will sit on their hands until things become clearer. Reducing interest rates, as far as that is possible, may well have a positive impact on my own industry. But it must be remembered that property investment is a long game.
My view is that we will see short term pain, but before too long we will see Britain – and my own commercial property industry – bounce back.
And strongly!

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Vanessa Penn

About Vanessa Penn

Vanessa Penn was formerly Director of Commercial Agency for Countrywide Commercial, Bradford & Bingley and Douglas Duff part of Erinaceous Plc. Vanessa now runs her own agency Penn Commercial located in Ipswich, Suffolk www.penncommercial.co.uk. Penn Commercial boasts a number of local, regional and national clients and has formed an excellent and loyal client base.
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