Should I be worried about a recession?
Pioneer’s Danny Williams answers your questions. This month: “Demand suddenly seems to have dropped off a cliff – should I be worried about an impending recession?” BT, Suffolk.
Yes! I believe that we all should be worried, although I am not sure we will go into recession. I am assuming that you focus on the private home improvement market and for this the Brexit vote and general election have done immeasurable harm to the one key element that drives our industry: homeowner confidence.
These two political decisions will be studied by generations to come as political cock ups of mind-blowing stupidity. We have been transformed from a stable, confident nation to one in which doubt is the overriding mood.
However, I am a great optimist and believe that human nature is pre-conditioned to seek out its desires, comforts and to constantly improve itself. And we Brits have an extraordinary instinct for improving our homes, often against common sense.
We are located in Essex and are therefore more affected than many other parts of the country by London property prices overheating. I don’t believe that the high end of property in central London will be affected but there is clear evidence that house prices in the real world are actually falling. I keep an eye on local property prices and all but exceptional properties are slow to sell – some are now being reduced, still with no takers. It’s slow.
However, as we move forward, the ‘improve, not move’ philosophy will kick in, just as it has many times before when house sales have become sticky.
In fact, I have just read research published by Plentific.com that indicates a strong increase in London buyers (34% up from 26%) who want to sell their properties this year, although this is countered by fewer homeowners in other UK cities that are looking to sell. The notion is that homeowners in areas experiencing the highest increases in the value of their properties want to cash in at the top of the market, though I suspect they may just be too late.
The Plentific research also found that a greater proportion of London homeowners (39%) intended to spend money on their homes in the next year. This is more typical behaviour when the economy looks a tad wobbly, and it is up to us as an industry to make sure we get our fair share.
We must not forget new housing – there is a government commitment to encourage the building of thousands of new homes, for both the private and public sectors. And while the larger estates these tend to be served by the large developers, there are plenty of opportunities supplying smaller builders. Spread the risk and go after these.
In short, there may be some emerging trends, but expect easy pickings for some time to come.