With manufacturers struggling, high street doom and gloom and general Brexit uncertainty Manchester property expert Mark Bailey warns that a recession is coming.
Taking a look at the construction and property market the MD of Landwood Group claims Britain is set to face an uncertain economic future – with signs emulating the last recession already visible.
With a rise in properties going into receivership, banks unwilling to lend for construction projects and a decline in tenants looking to rent business or residential properties – its clear the squeeze is on.
Rightmove last night announced the number of sellers coming to market is down by 13.5 per cent compared to this time last year – with the imminence of Brexit deterring sellers who do not need to sell right now.
The figures reflect the very real times of political uncertainty – putting off would be sellers while the market steals itself for Brexit.
A rise in auction sales is also evident – in the first half of 2019 auction sales increased by 800 per cent at Landwood – largely down to an increase in repossessions.
Since the end of August this trend has continued – reflecting the uncertainty in the marketplace.
And the news from the rental market isn’t much better – giving clearer indications of the property sinkhole we could be headed down. Rightmove revealed almost a quarter of landlords (24%) are planning to sell at least one property from their current portfolio despite record asking rents.
Nationally, the number of available rental properties is 13% lower than previous record lows recorded in 2015 and 24% down in London, as tax changes deter new and existing landlords.
However it’s not all bad news. Buyer activities haven’t stopped, there is still the opportunity for buyers to secure a good deal, reflected in the data that sales are down year-on-year by just 0.5 per cent.
And Landwood believe there are areas of exception to the misery – none least than their Headquarters in Manchester.
With a skyline full of cranes the city centre continues to grow apace proving that sporadic growth hotspots where investment continues do exist.
Liverpool, Leeds and Bristol are also investment areas – and they have in common; a relatively young population and a well qualified workforce in jobs that give a good work/life balance.
Mark Bailey, managing director of Landwood Group and Landwood Property Auctions, a leading firm of chartered surveyors, asset managers and online auctioneers, said:
“How is your business doing is the question on everyone’s lips at the moment? And depending on what you make, buy or sell, the answer is going to be wildly different.
“More worryingly, at Landwood we are also receiving more instructions over the past few months than we have done for a year or more – instructions for properties that have sadly gone into receivership.
“It is harder for property owners to let business space and for domestic landlords to find tenants – there’s no doubt that a squeeze is on.
“With each failed building project, banks become more nervous to lend, builders stop building… and we fall headlong into a dreaded recession. Once we do, it’s anyone’s guess how deep it is or how long it lasts.
“The blame for all of this cannot be put at the door of Brexit… well, not entirely. There is no arguing with the fact that this is a period of change – domestically and globally. People err to the negative whenever there is change on the horizon – until events transpire and the scales balance out. The big issue is uncertainty and property is key to all of this. Uncertainty causes negativity, while a solid market has the opposite effect.”
So, if the pointers are all correct and a recession is upon us, what’s the advice?
“Sit tight,” says Mark. “Whether you are a commercial property owner or a domestic landlord, try your best to ride it out, perhaps for six months, before making any business decisions. Look at your borrowings and don’t over-stretch yourself at this time.
“There are always people who benefit from downturns in the market and they tend to be cash buyers. So if you have cash to invest long-term, a ripe time to buy may be about to begin.”