The political stalemate continues over Brexit, and with the withdrawal date now extended to 31 October 2019 this could leave us with a Summer in limbo as the uncertainty remains. Parliament has so far failed to find an answer and as we approach the 3rd anniversary of the Brexit vote there is little clarity over the way forward and the nature of our future relationship with the EU. It is however possible that a softer political consensus will emerge.
Meanwhile despite these challenges and a global slowdown the UK economy paces onward. The economy is growing and, despite the cautious forecasting, economic progress is being made. The Government expects growth of 1.2% for 2019 and 1.4% for 2020 which is fairly uninspiring but with the possibility of perhaps a slight bounce if a consensus is reached and a Brexit deal is finally done.
Whilst economic growth is on the low side other indicators in early 2019 are mildly positive. According to the ONS, unemployment fell to 1.34 million, or 3.9%, in the 3 months to February which is the lowest rate since 1975. Wage growth continues at an estimated 3.4% and inflation has fallen again to 1.9% in March easing the income squeeze. The upshot for interest rates is benign with expectations for no change to the current rate of 0.75% for now and a stable outlook. So in general terms, Brexit aside, UK plc is faring ok, and in reality the economy is not far from the Goldilocks zone, not too hot to create inflation warranting a rate rise, and not too cold risking a recession.
In terms of the real estate markets, both residential and commercial, these remain active but thinner on the whole with many participants on the sidelines watching and waiting for the uncertainty to pass. The residential market is tight and despite the most recent ONS statistics for February showing house price growth of 0.6% in February, the lowest since September 2012 and a fall in London, there is a growing forward view amongst the investment community that we are at, or near, the bottom.
In general terms, there are many transactions occurring, often underpinned by sturdy occupational markets or discounted pricing for opportunity and risk (particularly in the retail sector) and life carries on. The Allsop teams, across the board, remain very busy.