There are far worse economies than ours, writes Steven Nicholas, chief executive of Tiuta
It never rains, but it pours as the old adage goes. This old saying is certainly true of the Spring showers we have been battered by lately, but is also equally applicable to the economic climate. We all knew the storm clouds were gathering and the Office of National Statistics last week confirmed the suspicions with the news that the 0.2% economy contraction in Q1 means the UK has entered a ‘technical’ double-dip recession.
Coming off the back of a Budget that left many different demographics feeling cold shouldered by the Government, it is not hard to see why few forecasters are predicting much sunshine in the coming months.
It can be hard to find the silver lining on such occasions but, though it may feel like it, it is not all doom and gloom at the minute. The buy-to-let and bridging sectors are both bucking the wider stale trend and are providing some illumination in the form of impressive year-on-year growth and renewed investor interest.
One area that often remains immune to economic misfortune is the high net-worth sector and that has certainly been the case this time around if demand for our large loan tranche and prime property in Central London is anything to go by. Knight Frank’s latest index for top-end property in the capital showed that values are up 11.6% in the past year and have now risen 43% from their post-Lehman collapse low point.
The UK economy may be feeling sorry for itself, but it is still in finer fettle than many of its European counterparts and continued uncertainty in the Eurozone will see ongoing demand for prime London property as it is seen as a safe haven for foreign investors’ cash.
I guess this last point is what I’m trying to get at here. There is always someone worse off than you and it is important to take the positives from every situation. Yes, the economy may be plateauing at present, but it was never going to be a flawlessly unchecked recovery from one of the greatest downturns in living memory. Neither should we forget the progress we have made to even get to this point or how the economy, being as it is, has allowed sectors such as bridging to flourish. It is nice to think that short and medium-term lenders could make a mark without things being as they are, but the reality is that the suppression of lending appetite among the high-street banks has created a gap that lenders such as Tiuta have capitalised on.
Brits themselves are nothing if not resilient and the latest raft of bad news regarding the economy certainly doesn’t seem to have shifted our stiff upper lip. In fact, a report published recently by the advertising agency McCann London revealed that Britons currently feel more optimistic than at any point since the start of the financial crisis. The annual ‘Moody Britain’ survey of public attitudes found that the number of people describing the nation’s mood as ‘angry’ has fallen to its lowest level since the recession began, while the proportion of those described as ‘hopeful’ has soared by 127% since 2010. Almost half of those polled consider themselves to be born at a fortunate time and three-quarters of the 2,000-plus respondents polled agreed that “despite its faults, Britain is still a great country to live in”.
It’s not always easy in times of trouble, but sometimes it is important to be thankful for what we have. In the words of the report: “The future is no more certain, but we feel more confident that we can roll with the punches. At the same time, problems such as the Eurozone meltdown have put our issues into perspective. It’s not great, but at least it’s not Greece.”