Earlier this afternoon, news broke that Liz Truss the UK’s (former) Prime Minister, has resigned from her role after just 44 days in charge.
Following on from weeks of economic instability, which saw the pound drop to its lowest versus the dollar in over 37 years, and days from the fallout of sacking Kwasi Kwarteng as Chancellor of the Exchequer. Liz Truss has stepped down from her position of Prime Minister.
The move has rippling effects once again on the UK’s economic stability and after a turbulent 44 days, the UK’s leadership structure is showing no signs of steadying.
So what does this mean for the property sector and in particular the commercial industry?
Well for starters, its a great triumph to see the commercial property sector remain so buoyant throughout the last 3 years and the industry has shown great resilience despite economic uncertainty and drastic changes. Going forward, unless anything changes, there is only so long the commercial sector can remain so resilient to this instability before cracks begin to emerge unless the overall state of the UK economy can stabilise. Mortgage rates both residential and commercial are at decade highs with interest rates well over 6% for the majority of deals. Many lenders have removed mortgage offers amid uncertainty and the future is one of turmoil for the property sector for the forseeable.
Many predict a slow down in transactional exchanges and a reduction in house price growth percentages with slightly fewer even predicting a housing crisis or property crash. The only certainty is the uncertainty for the commercial sector for the time being and professionals across the entire sector are proving just how tough the UK commercial property sector is, despite the ongoings in the capital. In regard to the West Midlands in particular, as we are Midlands based commercial agents, the individual sectors of commercial assets are all performing well with particular focus on office and industrial which seems to be at almost pre-pandemic levels. The overall feel of the sector at the moment is one of determination with so many businesses wanting to push forward from the pandemic, regardless of how badly Downing St is handling the country.
There is absolutely no doubt that everyone wants to move on from Liz Truss’ turbulent 44 days and get our economy back on track. Going forward, it seems the commercial property will continue to remain strong whilst a slight wariness hangs in the clouds over the next 12-24 months.