The commercial property market is intrinsically tied up with the condition of the UK economy as a whole; it plays its own part in it and, working well, can provide a boost to the employment figures and a tax income for the country. On the other hand, it is also on the receiving end of a slow economy which dips in and out of recession.
While the US is becoming more comfortable with the phrase ‘post-recession’, it is not so freely used here in the UK and, if it were used at all, would be whispered, as though not wishing to tempt fate.
The ride does not seem to be getting much easier for anyone yet, not least the person steering it, the Chancellor of the Exchequer George Osborne. However, he may catch his breath briefly this week as it seems that Britain’s budget deficit narrowed more than economists anticipated in March, due partly to a reduction in capital spending.
Ignoring the temporary support given to the banks, according to the Office for National Statistics the deficit shortfall was £15.1 billion, down from £16.7 billion a year earlier, the anticipated shortfall having been put at £15.5 billion.
The latest figures show that the UK still teeters on the edge of recession, and if it falls, it will be the country’s third recession in five years. Against a backdrop of the UK losing its Fitch Ratings top credit grade, and the advice from the IMF to Osborne to reduce the rate of deficit reduction, the recent positive news may only be a temporary soother.
At the end of March the year’s figures showed a slight overall decrease in the deficit, from £120.9 billion to £120.6 billion.
Eugene O’Sullivan, Director at Morgan Pryce, states, “The rate of improvement is really too low to have any impact ‘on the ground’. What we don’t want is for investors – especially overseas ones – to become reluctant to invest in the UK and London. Despite the figures, the property market seems to be holding its own at the moment.”
Business and personal spending, the slow housing market and employment figures have also contributed to a reduction in tax income for the government, which fell 5.7% in March compared to a year earlier.
Morgan Pryce is a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.
