It’s been a tough year
It’s a natural time of year for reflection, so I thought I would briefly consider what has happened of importance in the past year and what 2013 might bring.
In property, the markets have reflected the austerity economy with low demand, shortage of finance and a lack of confidence – but there is still a market in which to operate.
My business has seen a growth of about 15% compared to the previous year but I’m finding that it is taking a lot longer to negotiate and complete transactions. The general lack of confidence is exacerbated by financial constraints and demands, in particular from the banks, who in dealing with lending are being a lot more critical in the assessment of risk and whether or not to lend.
There has been a drive by government and local councils to seek ways of kick-starting the property and construction sectors. Much of this is being focussed through the Local Enterprise Partnerships (LEPs) which are responsible for administering the Growing Places Fund and funding initiatives for housing.
The North East LEP received £25m from the Growing Places Fund and is eager to hear from anyone with ‘shovel ready’ schemes which need help to get started. We need to have a strong pipeline of such schemes, as there is likely to be more funding available through the LEPs during the course of 2013.
In addition to this, we have seen support from the City Deal scheme for Newcastle and Gateshead said to be worth £1bn over the next 25 years and a promise of further funding for Sunderland and Teesside in the second wave. Support for infrastructure is also being promulgated, including the improvement to the A1 Newcastle Gateshead Western Bypass.
One note of concern here is the lack of knowledge within the industry about what funding can be made available. Unless the private sector is fully involved it will slow down the process, and anything that can be done to ensure this funding is delivered more quickly will be welcome in 2013.
For a generation or so, the North East has been a fragile property sector which has required grant funding to keep it ‘propped up’. The days of ‘build it and they will come’ are well and truly over and our continuing challenge through 2013 is to wean ourselves from this debilitating scenario and ensure that all development is viable to attract much-needed private sector investment.
The sooner that we can achieve a self-sustaining, viable property market, the healthier our regional economy will become. I look forward to 2013 being the year of transition, with more demand in the market and a greater willingness from the private sector to invest.
On a wider note, an area of concern for all of us must be the challenges that we have seen to values in our society. At a national level, we have seen the obfuscation of politicians’ expenses; allegations of a cover up by the police and manipulation of evidence to smear a senior politician; and disregard by some journalists for the law and standards arising in the ‘phone hacking’ scandal. The various debates concerning self-regulation and accountability illustrates why standards are so important in life.
For the property sector, this highlights the role of the Royal Institution of Chartered Surveyors and other similar professional organisations, which for many years have enforced Rules of Conduct on their members.
The RICS, for example, publishes rules for Real Estate Agency, acting as an Expert Witness, and Independent Surveyor and an Arbitrator amongst others, all setting minimum standards which are policed with sanctions to ensure that there is compliance.
It would be good to see such standards reinforced across society, to mitigate the impact of austerity which puts pressure on us all.
That same austerity has also hit charities, which are suffering from lessening donations and having to curtail their services to people in need and the disadvantaged. On a personal note, I would encourage those that are ‘rich in time’ to step in and help with pro bono services in support. This is a theme that as chairman of the Newcastle City Centre Chaplaincy I would like to see developed much more during 2013.
On that note, I would also like to offer my very best wishes for a healthy and happy year to all.
This was posted in Bdaily's Members' News section by Kevan Carrick .
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