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Celebrations galore and a sense of opportunity
Both the Bank of England and The Royal Institution of Chartered Surveyors report a mixed month in the wake of the Jubilee Celebration and the run-up to London 2012.
In the housing market, they report, the fairly widespread improvement in activity since the start of the year appeared to have dissipated somewhat. Some contacts believed that activity had been deterred by worries about the economic outlook, perhaps related to developments in the euro area. And a few, in particularly buoyant parts of the country, attributed the softening in the market to a dip in demand following the end of stamp duty relief for first-time buyers, as some transactions had been brought forward ahead of the deadline.
Buy-to-let investors continued to support demand, however, and there were further reports of first-time buyers returning to the market. Contacts thought that for some of those first-time buyers it had taken until now to save a deposit, while some others were getting help from family.
But many remained constrained by tight credit conditions. There were signs of an emerging trend among the older age group to move to smaller properties.
Credit conditions seem to have tightened somewhat and some businesses were being actively encouraged to pay off outstanding loans. But companies with strong balance sheets tended to be able to borrow at reasonable terms.
A number reported that competition between lenders for the best credit risks had intensified. But their appetite to borrow often remained very low, with many firms still focused on paying down existing debt.
But again it is not all gloom and doom - while this is undoubtedly bad news for many businesses, particularly retail and commercial properties selling non-essential goods - it could be the perfect time to launch your own small business.
Historically most millionaires are created during recession and just after. With many companies shedding staff, there is an abundance of experienced workers with the know-how and finance to launch a start-up. These individuals have few overheads and can capitalise on the difficulties facing more established competitors.
This potential for growth is being exploited by government aiming help at enterprise and small businesses. Many local councils offer support packages to budding entrepreneurs, ranging from face to face advice sessions to help in finding commercial properties.
Another factor in favour of start-ups is the extension of small business rates relief which could mean businesses in the early stages of establishment could be receiving substantial relief.
At Walton and Hipkiss we offer advice visits to consider and advice on property requirements and also advice on how to get the best out of your existing assets whether residential or commercial.
Together these factors have led to a boom in business start-ups with a rise of 20% to 471,000. Increasing numbers of women and the over 50s displaying a strong entrepreneurial spirit.
With this trend set to continue in 2012, it is the ideal time for small businesses to buy commercial property.
Just like the residential market, the commercial property market is cyclical. The pattern it follows begins with recession – the current state of the market – before moving onto the stages of recovery and expansion. We have seen ourselves with market activity across all sectors predominantly coming form start ups and SME’s with lettings and sales in and around Stourbridge and further lettings at Hagley Hall where only a few units remain.
This makes a recession a buyer’s market as far as shops, offices, warehouses and other types of commercial property are concerned. It is at this time that small businesses will be able to get the most favourable deals and secure properties in prime locations that they would perhaps be unable to afford at any other time in the cycle.
So if you are one of the increasing numbers of people considering a business start-up this year you will find that, while the economic outlook is be bleak, it can present opportunities to anyone providing in demand services.
The fall in the rate of inflation and recent Bank of England consideration of reducing the interest rates even further puts confidence at an encouraging level.
The effect of the Diamond Jubilee and the London Olympics remains to be seen, but we can be hopeful that 2012 will continue to be a positive year with plenty of activity in the commercial property market.