So the people have spoken, and the UK is to leave the EU. The enormity of this statement is such that is it difficult – if not impossible – to adequately quantify at this stage, but that doesn’t stop the media enlisting expert commentators by the coachload to help us through this difficult time.
Call me dull (most do) but I quite enjoy the type of debate we are currently witnessing about the impact that recent developments are having on the economy and the wider markets. Mostly because, despite the genuinely impressive qualifications of many of the commentators talking us through events, no-body really knows what’s going on.
The aspect of the debate which I find less appealing is the discussion of the impact on ‘business’. Not because this is any less important, or interesting, but because I find it difficult to reconcile the type of ‘business’ referenced with the type of ‘business’ I engage with on a day to day basis.
For instance, in the last few days we have learned that Vodafone is considering moving its HQ out of the UK, HSBC is to remain in London despite the vote and the Virgin Group has cancelled a ‘very big deal’ worth 3,000 jobs as a result.
All of this is of course massive news, but it says little about the decisions being made by small and medium size businesses (SMEs) throughout the UK which are having to deal with many of the same challenges – just from a very different perspective.
Hence the question which is often overlooked by the media during the high-level discussion. What does Brexit mean for small businesses, like for instance, letting agents?
There’s most likely no right or wrong answer to this question – comments and suggestions are very welcome below this blog – but there are a few observations we can make.
- The sky isn’t falling. There is a lot going on right now. For some it will provide opportunities, for others business will become much more challenging – but overall the best thing most of us can do for the time being is to carry on making the best of our respective businesses.
- It is unlikely that many letting agencies would survive re-locating to mainland Europe. Unlike Vodafone few of us have the luxury of re-location, so focussing on the local market is probably best.
- No matter how they voted, people still need somewhere to live. OK this one really depends on where you’re based. Businesses in some areas will be looking very nervously at their local population of tenants, trying to work out what will happen to demand if EU migration is limited – but for short to medium term very little should change.
- It looks quite likely that Interest Rates will stay low for some time to come. The Governor of the Bank of England has hinted (heavily) that he is in favour of reducing rates this summer. Even if the rest of the MPC disagree it is unlikely we will see increases in the near future unless inflation makes an unexpected appearance. This means conventional saving will continue to make little sense and property will appeal to many. Likewise lending costs should stay relatively low for businesses and their customers allowing investment and innovation. Whether this is enough to off-set the outgoing Chancellor’s agenda of bleeding landlords dry remains to be seen, but every cloud………
- Finally, the immediate consequence of Vote Leave’s victory is the demise of the Cameron/Osborne duopoly of the Conservative Party. At this point the odds are that Theresa May will be Prime Minister by mid-September – but a lot can change in two months – and we are very likely to see new leadership at HM Treasury. This could mean an opportunity to change some very unpopular policies and give the private rented sector a much needed boost..
So what’s the conclusion?
We probably have to wait for any definitive answers – and it could be a long wait. In the meantime, life goes on and crucially so does business for all of us below the media’s radar.
Let the politicians fight amongst each other. Let the economists predict prosperity and chaos in equal measure. All the while list as many properties as possible, reassure your clients and applicants that life goes on and property is still a steady long-term bet.
In other words, if we all carry on doing what we’re best at the odds of avoiding complete chaos are much better than if we spend too much time worrying about things outside of our control.