How will the economy survive the current crisis?
There is no doubt that the current crisis, is one of the greatest tests our economy has faced in decades. There are without doubt, many small to medium sized businesses that will suffer greatly, despite the drastic steps taken by the chancellor to lessen the blow. Personally, I feel that rents, rates & interest should have been suspended during this period, to minimise the damage of this terrible situation.
However, moving forward, the question we may all be asking ourselves is, how will the economy cope with this? What will happen to the property market when it is brought out of deep-freeze? Despite the alarming figures suggested by many media sources, this is not the same as the banking crisis of 2008. The banks are in good shape, borrowers are not in negative equity and there is a very large number of businesses that have been able to continue operating though this crisis, albeit at a skeleton level. The manner in which the nation exits from lockdown may have serious implications on what happens within the first few weeks, which is of paramount importance.
There are also factors at a greater level that once again, may save this island nation of ours. Whichever side of the fence any of you may have been during the charade that was Brexit, I would hazard a guess that even the most ardent of remainers must now be doing their sums and breathing sighs of relief (quietly of course) that the prospect of our economy being shackled to the chains of a financial abyss that may well be Europe after this, will be safely independent.
After the financial crisis of 2008, money poured in to the London market from countries outside of the EU because were WERE NOT part of the Euro, indeed, we were a safe haven. Most rising property markets are ‘bottom-up’ markets, that is, property at the bottom rises and pushes prices up throughout the market. The ripples that begin at the bottom in London, work their way upwards and outwards, not only throughout London, but gradually throughout the whole country. However in 2008, this was not the case, it was a ‘top-down’ rising market, investment from the top, raised the prices at the top end of the market in London, which for the first time , worked their way downwards pulling prices upwards. This is without doubt testament to our wonderful currency, the faith in our first class national credit rating.
It is without doubt, that if the forthcoming weeks and months are handled correctly, which I am very confident of, not because of party politics, but due to faith in the fiscal policy of those in charge, that our economy will not just bounce back, it will actually REBOUND.
Therefore, the issue we currently face is to get through the current crisis safely and to use this time to re-connect with our families, to re-connect with that which is most important and also to prepare to re-start our nation and recover, socially, commercially and financially.